Climate change and energy policy in Chile: Up in smoke?

Abstract

This paper provides an ex-post assessment of the climate and energy policy developments in Chile emerging from a neoliberal economic model, during the period 1971–2007. First, correlation and regression analyses were performed to analyse historical CO2 emissions as a product of demographic, economic and energy-wide drivers. Then I estimate indicators related to CO2 emissions, energy use and economic activity. In the light of empirical results, I identify policy instruments and structural issues. Finally, I present a comparative analysis of Chile and other Latin American countries. Statistical tests show that variability of CO2 emissions is explained mostly by GDP per capita (‘affluence’) than any other tested variable. Indicators show that the diversification and decarbonisation of the energy mix has been a major policy challenge. With two notable exceptions (hydro and natural gas), the CO2 intensity of the energy supply mix suggests no effective policies, while energy security crises triggered negative carbon effects and increased prices. No clear policies to promote energy efficiency can be identified until 2005. Explicit policy instruments to promote renewable energy are only recognised after 2004. The results strongly suggest that Chile lacked of policies to effectively decarbonise its energy–economy system.