Chile is at a crossroads. Copper prices are falling, the gap between energy supply and demand is widening, and in December the second round of presidential elections will determine who will lead Chile in the next administration. Chile faces a difficult balancing act to maintain its strong economic growth and the energy this requires, while ensuring progress on its climate, environmental and clean energy goals. In this whirlwind of domestic change, Chile has the opportunity to reaffirm its position as a global leader on climate change.
Chile has the highest income per capita in all of South America, largely thanks to a recent boom in copper exports to China. Yet mining is energy-intensive and the government estimates that Chile will need to increase its energy supply 16% by 2020. As an energy-poor country, Chile is forced to import 75% of its energy, including expensive liquid natural gas. Sourcing this energy and its high price tag has generated a politicized and difficult debate without an easy way forward.
Meanwhile, Chile is making progress on its pledge to reduce its greenhouse gas emissions 20% below 2007 levels by 2020. Chile also recently doubled its renewable energy target from 10% by 2024 to 20% by 2025. At the UN climate change negotiations, Chile is part of the Association of Independent Latin American and Caribbean States (AILAC, in Spanish), which includes Colombia, Costa Rica, Guatemala, Panama, and Peru. This group, currently co-chaired by Chile and Colombia, emerged in 2012 in an effort to break away from the stifling North-South divide and push for binding emission reductions for all countries in a new treaty by 2015.
As the recent COP19 climate negotiations in Poland entered their second week, former Chilean president Michelle Bachelet secured an easy victory in the first round of presidential elections. In December Bachelet will face a runoff with the second-place candidate, Evelyn Matthei, from which she will likely emerge the winner.
Current president Sebastián Piñera will leave office without establishing a clear vision on national energy policy. Bachelet supports a variety of energy projects, including new coal-fired power plants and expanded import of liquid natural gas. Alarmingly, discussions of climate change and low-carbon development were largely absent from the presidential campaign.
At the center of this prickly energy debate is the controversy surrounding HidroAysén, a proposed 2,750-megawatt hydroelectric project in Patagonia. Piñera’s administration has postponed a decision on HidroAysén until after the elections. Bachelet is often quoted as saying that HidroAysén is “not viable.” Yet Waldemar Coutts, from Chile’s Ministry of Foreign Affairs, believes Chile “needs to seek new energy sources to maintain growth, highlighting, in particular, non-conventional renewables.” Though Bachelet continues to promote importing expensive liquid natural gas, mounting pressure to feed the country’s hunger for energy could push her to reconsider her position on HidroAysén.
Andrés Pirazzoli, from Chile’s Office of Climate Change, said of the election, “We don’t foresee that it’s going to have significant impact [on climate change policy] due to nonpartisan consistency across administrations.”
Enrique Maurtua, regional coordinator for the Latin American branch of the Climate Action Network, is confident in Chile’s ability to lead AILAC alongside Colombia, but notes the tension between environmental concerns and Chile’s interests as a mining country. “If they succeed on the energy issues they are having, they will be a good model for the rest of Latin America,” he said.
Chile is not the only AILAC country whose economy depends on the extraction of natural resources. AILAC’s members’ similar backgrounds support collective ambition: all AILAC countries have pre-2020 mitigation commitments, which is not true for many other developing countries. Might Chile take the plunge to further solidify its leadership and increase its own ambition before 2020? “It is still early to say, but Chile is doing its best to build capacity at home and develop as many domestic mitigation actions plans as possible. We want to quantify our every effort towards our goal, with an aim to exceed the challenge,” said Pirazzoli.
In the meantime, Coutts states, “We are a constructive group of countries, but we do not hesitate to demand that developed countries do more in terms of providing leadership and financial assistance.”
After the limited success of COP19, attention is shifting rapidly to the UN climate negotiations in 2014. With the pre-COP in Venezuela and COP20 in Peru, 2014 will be Latin America’s year. This is an opportunity for Chile and AILAC to exert a larger influence in the push for significant commitments and a new climate change regime by 2015. Yet AILAC can only be an international pacesetter if the domestic policies of its member countries reflect the group’s ambitious rhetoric at the UN.
With a new administration and shifting dynamics in the energy and mining sectors, Chile is on the precipice of change and can seize the opportunity to consolidate and enhance its actions on climate change. Backtracking now or failing to sufficiently implement its domestic policies will only serve to dilute Chile and AILAC’s progressive voice and leadership. Both are urgently needed to push aside the North-South divide and progress towards an ambitious and binding agreement for all countries in 2015.
Another version of this article was originally published here.