Greenhouse Gas Mitigation Beyond the Nationally Determined Contributions in Chile: An Assessment of Alternatives

Environmental Defense Fund Economics Discussion Paper Series, EDF EDP 23-02, June 2023

206 Pages Posted: 10 Jul 2023

See all articles by José Miguel Valdes

José Miguel Valdes

Pontificia Universidad Católica de Chile

Álvaro Lorca

Pontificia Universidad Católica de Chile

Cristian Salas

Pontificia Universidad Católica de Chile

Francisco Pinto

Pontificia Universidad Católica de Chile

Rocío Herrera

GreenLab

Alejandro Bañados

GreenLab

Raúl Urtubia

Vinken

Patricio Castillo

Vinken

Lucas Maulén

Vinken

Diego González

Pontificia Universidad Católica de Chile

Date Written: June 16, 2023

Abstract

In support of the Climate Action Teams initiative, we evaluate Chile's potential for greenhouse gas (GHG) mitigation beyond its Nationally Determined Contributions (NDCs) through implementing ambitious actions. An open multisector model is used to project GHG emissions. The results indicate that additional efforts are required to meet Chile's NDC commitments. However, ambitious actions could yield a significant mitigation surplus at a reasonable cost, with a maximum potential of 75 (65–82) MtCO2e beyond the committed carbon budget. About one-third of this potential can be achieved at a mean abatement cost of less than 20 USD/tCO2e, and an additional 65% can be obtained with a mean abatement cost ranging between 20 and 50 USD/tCO2e. The estimated capital cost required for implementing these actions is 5.3 (4.9–5.3) billion USD from 2020 to 2030. In addition to mitigating GHG emissions, these actions also have significant health co-benefits, with an estimated avoidance of up to 2,250 (2,180–2,320) premature PM2.5-induced deaths between 2020 and 2030. The health co-benefit between 2020 and 2030 is estimated to be around 1.5 billion USD. The study also suggests that an early coal-power phase-out is not the most efficient mitigation action in the power sector. We estimate that a carbon tax between 40–45 USD/tCO2e could achieve the same level of emissions reduction as closing coal-fired power by 2025 but at a significantly lower cost.

Keywords: Climate Action Teams, Open-Access Model, Mitigation, Chile’s NDC, Marginal Carbon Costs

JEL Classification: Q5, Q54

Suggested Citation

Valdes, José Miguel and Lorca, Álvaro and Salas, Cristian and Pinto, Francisco and Herrera, Rocío and Bañados, Alejandro and Urtubia, Raúl and Castillo, Patricio and Maulén, Lucas and González, Diego, Greenhouse Gas Mitigation Beyond the Nationally Determined Contributions in Chile: An Assessment of Alternatives (June 16, 2023). Environmental Defense Fund Economics Discussion Paper Series, EDF EDP 23-02, June 2023, Available at SSRN: https://ssrn.com/abstract=4481537 or http://dx.doi.org/10.2139/ssrn.4481537

José Miguel Valdes (Contact Author)

Pontificia Universidad Católica de Chile ( email )

Av Libertador General Bernardo O'Higgins 340
Santiago, Región Metropolitana 8331150
Chile

Álvaro Lorca

Pontificia Universidad Católica de Chile ( email )

Av Libertador General Bernardo O'Higgins 340
Santiago, Región Metropolitana 8331150
Chile

Cristian Salas

Pontificia Universidad Católica de Chile

Francisco Pinto

Pontificia Universidad Católica de Chile ( email )

Av Libertador General Bernardo O'Higgins 340
Santiago, Región Metropolitana 8331150
Chile

Rocío Herrera

GreenLab

Raúl Urtubia

Vinken ( email )

Lucas Maulén

Vinken

Diego González

Pontificia Universidad Católica de Chile ( email )

Av Libertador General Bernardo O'Higgins 340
Santiago, Región Metropolitana 8331150
Chile

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
226
Abstract Views
893
Rank
252,699
PlumX Metrics