Climate Finance in Chile

Climate Finance in Chile Carbon Expo 2015

Francisco Pinto Ministry of the Environment of Chile

May, 2015

Gobierno de Chile | Ministerio del Medio Ambiente

Outline

• Context

• GHG mitigation policies and actions

• Needs and suport received

• Climate Expenditure

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Context I

• Some figures: – Population: 17,556,815 – GDP (ppp) per cápita (2013): US$21,942 – Gini (2013): 0,50 (OECD average: 0,31)

• Chile is not a major contributor of GHG

emissions. In 2010: – total emissions: 91,575.9 GgCO2 eq (0,25%

total). – Per capita emissions: 5.3 t CO2 eq per year

• Increasing GHG emissions: 83.5% (1990-2010) • Main drivers Energy and Agriculture sectors

(90% total national emissions) 3

• 75% GHG total • Drivers:

• coal and diesel consumption for electricity generation (40%)

• Liquid fuel (31%)

• 15% GHG total • Drivers:

• Use of synthetic nitrogen-based fertilizers

• 10% total employment


Context II • Chile is a highly vulnerable country for

climate change (IPCC, 2001).

• The economic losses are estimated to be around 1,1% of annual GDP (2010-2100).

• Negative impacts on: – Mining – Agriculture – Drinking water – Hydropower – Health

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Context III • Institutional framework:

– Ministry of the Environment (2010)

• Climate Change Department (CCD)

– Ministry of Energy (2010)

– Ministers Council for Sustainability and Climate Change (2014)

• National Climate Change Action Plan, 2008-2012 (PANCC)

• Today working on PANCC 2016-2021

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GHG Mitigation I • In 2009 Chile voluntarily announced its willingness to join a global

effort to mitigate greenhouse gas emissions. – Reducing, by 2020, 20% of projected emissions from 2007 (BAU scenario)

through nationally appropriate mitigation actions. 1. Policies and actions

– Energy efficiency – Renewable energy

• Today 33% (Expected: 45% by 2025)

2. Nine Nationally Appropriate Mitigation Actions (NAMAs)

– Five registered with the UNFCCC NAMA Registry, for example: • Clean Production Agreements • National Forestry and Climate Change Strategy

3. Measurement, reporting and verification (MRV) of mitigation

actions – Fostering transparency in GHG mitigation actions implemented in the

country.

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GHG Mitigation II 4. Market-based instruments for environmental externalities (PMR

support) – Green Taxes:

• In September 2014, Chile passed a green tax law. • Three new taxes were introduced:

– Tax on CO2 emissions from stationary sources with boilers and turbines – tax on local contaminants also on stationary sources with boilers and turbines

(PM, SO2 and NOX). – tax on the first sale of new cars considering the expected NOx emissions over

their lifetime. – These taxes will be implemented in 2017, and require detailed regulation which

will be developed during 2015 and implemented in 2016.

– Exploring potential emissions trading systems (ETS)

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Needs and support received I • Chile’s institutional structure and capacities have advanced

substantially in recent years. Nonetheless, there are needs, gaps and barriers that hinder the development of climate actions.

• Barriers: – Inability to receive direct international funding (Budget law) – Difficult fund allocation to climate change-related matters (not identified by

laws)

• Needs

– Reporting: to establish permanent and binding reporting systems for the country’s National Communications.

– Mitigation: Development of information management systems in all sectors. – National GHG Inventory: To integrate IT system for housing data and

supporting the work of SNICHILE. – PANCC (2016-2021): Adaptation and mitigation

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Needs and support received II • Support received:

– As a developing country, Chile is always seeking for international support.

• Between 2011 and 2014: US$ 8,054,941. – Not including contributions approved but not yet available

(US$39,083,420)

• 50%: Donation from a group of countries and organizations working collectively on a specific initiative

• 40%: Bilateral-country-specific donations • 10%: International finance agencies

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Needs and support received III • Government projects and programs that have received the bulk

of funding

• Mitigation Action Plans and Scenarios (MAPS) • Low Emission Capacity Building (LECB) • Climate Change projects sponsored by GEF • The Forest Carbon Partnership Facility • Partnership Market Readiness (PMR)

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• PNUD (Germany, Australia and European Comission

• Defining and operationalizing a National Inventory System

• Conceptualizing MRV system for NAMAs

• Children Investment Fund Foundation (CIFF)

• La Alianza Clima y Desarrollo (CDKN) • Switzerland • Denmark • Chile

• Business as Usual (BAU) and

Required by Science (RBS) scenarios. • Mitigation options and scenarios • Policy briefing

• The World Bank (Australia, Denmark, European Comission, Finland, Germany, Japan, Netherlands, Norway, Spain, Sweden, Switzerland, United Kingdom, United State)

• Regulatory, Economic and Institutional Analyses needed to asses the viability of a carbon pricing instrument for the energy sector.

• Design and implementation of MRV framework and Registry system.

• Communication strategy and stakeholder engagement.


Climate Expenditure • Climate Public Expenditure and Institutional Review (CPEIR)

– Supported by LECB

• The CPEIR examines the linkages between the three spheres of: national climate change policy; the institutional structures through which policy is channelled; and the resource allocation processes whereby public funding is made available for the implementation of relevant projects, programmes and policies.

• Chile – Public Sector (2015)

• 2010-2014 • Sector: Energy and Agriculture

– Private Sector (2016)

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Thanks

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Climate Finance in Chile

Environment

chile ministerio

total emissions

environment of chile

ghg mitigation actions

medio ambiente ghg mitigation

total national emissions

medio ambiente context

co2 emissions