Global Carbon Market – Chile

Project description

Title: Global Carbon Market
Commissioned by: German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB)
Country: Chile
Lead executing agency: Ministerio de Energía
Overall term: 2015 to 2018

Context

For the German Government, a global carbon market is an important instrument for international climate protection. The trading of emissions allows mitigation activities to take place first in places where they are least expensive. This makes mitigation activities less costly, with the result that effective carbon markets can contribute to states setting more ambitious climate targets and the private sector making more climate-friendly investments.

In 2008, the German Federal Environment Ministry launched the CDM /JI Initiative to support its partner countries in using the flexible mechanisms of the Kyoto Protocol – the Clean Development Mechanism (CDM) and Joint Implementation (JI). The Global Carbon Market project is part of the CDM/JI Initiative, and supports its objectives in Uganda, Chile and India.

In its nationally determined contribution (NDC) under the Paris Agreement (which was passed in 2015 and came into force in 2016), Chile has committed itself to reducing its greenhouse gas emissions by 30 percent by 2030, compared to 2007. On the condition that it receives international support, the country is even willing to reduce its emissions by between 35 and 45 percent. Chile is working to achieve these mitigation objectives in the scope of its national climate policies, including the climate change action plan and the action plan for energy efficiency.

In the context of a comprehensive tax reform, Chile is also introducing a carbon tax. Furthermore, it is planning to introduce a national emissions trading system. A local platform for the voluntary trading of greenhouse gas emission reductions – the Santiago Climate Exchange – has already existed since 2009.

Objective

Public and private decision-makers in Chile have the necessary knowledge and skills to use existing and new carbon market instruments for the implementation of their national climate change mitigation actions.

Approach

Chile’s national climate policies are the basis for all project activities in the country. The most important partner for cooperation is the Chilean Energy Ministry, which plays the lead role with respect to carbon market instruments. Other important partners include the Environment Ministry, the Ministry of Finance and the Interministerial Committee on Climate Change. The project supports its partners through studies, dialogue forums, conferences and training measures, thereby contributing to the development of carbon market instruments.