November 25, 2022

Chile’s goals are clear: the country aims to achieve carbon neutrality by 2050. To reach this milestone, a comprehensive energy transition is essential to replace non-renewable sources with clean energy. Are we on the right track? Here, three experts analyze the key issues to address in this effort.


The Challenge of a Just Transition in Energy Decarbonization

By Cecilia Ibarra, researcher at the Climate Science and Resilience Center and academic at the Faculty of Government, Universidad de Chile.

The negative impacts of climate change disproportionately affect the most vulnerable populations. Events such as droughts, floods, heatwaves, and coastal erosion hit hardest those who lack resources to adapt. Similarly, measures to achieve decarbonization can increase inequality, such as when traditional jobs are lost due to replacing agricultural land with solar parks.

For carbon neutrality efforts to respect climate justice, they must ensure a fair distribution of costs and benefits and include the participation of all people impacted by these decisions.

“The transition to a low-carbon society must and can protect human rights.”

Chile has committed to respecting principles of equity and climate justice through national legislation (Article 2d of the Framework Law on Climate Change) and its adaptation and mitigation plans. The country also included a solidarity pillar in its international commitments, emphasizing a just transition in its Nationally Determined Contribution (NDC).

Transformational processes toward a low-carbon society must protect human rights and strengthen democracy while reducing inequality.


Challenges and Opportunities for a Carbon-Neutral Energy System

By Daniel Olivares, Director of the Energy Transition Center (CENTRA-UAI) and academic at the Faculty of Engineering and Sciences, Universidad Adolfo Ibáñez.

Chile boasts enviable solar generation potential across much of its territory, including in the most populated cities, and wind generation potential of up to 126 GW in the Magallanes and Chilean Antarctica Region. Given this, it’s not surprising that Chile has advanced rapidly in decarbonizing the electricity sector, largely driven by private initiatives.

“The success of national strategies for electromobility and green hydrogen has the potential to reduce our fossil fuel dependency significantly.”

However, the electricity sector accounts for only about 22% of the country’s energy consumption. To maintain a rapid pace in decarbonization, it is critical to translate our renewable potential into emissions reductions across the entire energy matrix. The successful implementation of electromobility and green hydrogen strategies can significantly decrease fossil fuel demand while boosting Chile’s potential as a clean energy exporter.

Efforts must also focus on industrial electrification and addressing structural barriers to developing distributed energy resources. These offer tremendous potential for sustainable and resilient development but require a comprehensive reform of the electricity distribution sector.


We Need to Pick Up the Pace

By María Teresa Cerda, Deputy Director of Fraunhofer Chile and the Center for Solar Energy Technologies.

Chile has endured 14 years of drought, yet the recurring headlines no longer draw attention. Although climate change and decarbonization are discussed, our progress is slow—too slow for a country poised to be one of the most affected by climate change.

Public-private partnerships and international cooperation are crucial. Chile’s limited resources and the public’s focus on social and economic concerns mean the environment is not a top priority. If we fail to address the climate crisis, by 2030, these priorities will pale in comparison to the irreversible damage we face. We are so consumed by immediate challenges that we attribute heatwaves and extreme weather to nature, assuming the status quo will persist and someone else will solve the problem.

“Chile has limited resources, and the environment is not among the public’s main concerns.”

Chile has the technology to achieve a 95% renewable energy matrix without issue. But the real challenge is addressing the financial costs of this transition, as change requires significant investment. Many industries could decarbonize their thermal matrices, yet the costs of innovation, new machinery, and workforce training often stall these efforts.

Germany and Chile spearheaded one of COP27’s most significant outcomes: a fund for countries affected by climate change, financed by developed nations. Germany is also investing abroad to decarbonize its energy matrix, with Chile positioned as a strategic ally. Partnering with such allies is essential to accelerating our path toward a sustainable solution.


Published in Diario Financiero on Friday, November 25, 2022.