Chilean pathways for mid-century carbon neutrality under high renewable potential

Abstract

Implementing nationally determined contributions is more challenging for developing countries given potential economic consequences. Chile, a developing economy, is committed to reaching carbon neutrality by 2050. To do so, Chile announced multiple mitigation strategies such as phasing out coal by 2040, peaking emissions by 2025, and developing renewable energies. Fortunately, Chile holds a prominent renewable potential, standing out for solar, but it also has a significant challenge decarbonizing an economy that heavily relies on fossil fuels. The contribution of this paper is twofold. First, the first country-level disaggregated version of GCAM Latin America (GCAM-LA) was developed, where all South American countries are modeled as an independent energy-economy region. This model includes Chile as a separated region and incorporates interactions among the energy, water, agriculture and land use, economy, and climate systems. Second, different decarbonization strategies to reach carbon neutrality by 2050 were obtained, considering technology availability and high renewable energy potential. Results indicate that carbon neutrality is feasible when enforcing different combinations of the current Chilean mitigation strategies, even delaying coal phase-out by five years and failure of developing advanced solar technologies. If some policies are not fully implemented, such as delaying coal phase-out by five years or failure of developing advanced solar technologies, carbon neutrality can be achieved by incurring in a higher capital cost in the power sector. Moreover, decarbonization is mainly driven by high electrification levels in the final demand sector, reaching 53.7%–62.9% of the total consumption. However, such levels of electrification are reduced, particularly in the transport sector, when Chile relies on negative emissions from the land use and forestry sector.