Eduardo Bitran: Global action is an opportunity for Chile
The Intergovernmental Panel on Climate Change delivered its sixth report in which it projects that the global warming limit of 2°C will be exceeded during the 21st century unless there are profound reductions in Greenhouse Gas emissions in the coming decades ( GHG).
In this context, the package of binding measures recently approved by the European Commission generates an expectation of advancing globally with the speed required by the climate challenge. The European Union commits to public policies with an ambitious goal of reducing GHG emissions by at least 55% by 2030. The main measure is to increase the rate of reduction of emission quotas for various sectors, which will increase the price of C02 . This agreement generates a new mechanism that establishes a price for carbon incorporated in imported goods. Added to these strong signals are the decarbonization requirements that the capital markets are establishing in corporate financing.
“Our country has an opportunity to advance in sustainable development given the enormous advantages we have in renewable energy”.
For Chile, the strengthening of global climate action represents good news, and not only because we are highly exposed to the effects of climate change. Our country has an opportunity to advance in sustainable development given the enormous advantages we have in renewable energy. Chile can generate a virtuous circle between determined climate and environmental action and the development of attractive businesses that impact productivity and stimulate investment, sustainable growth and the creation of quality jobs.
However, there are multiple uncertainties and coordination failures that generate inertia and inhibit the processes of technological change and investment necessary to take advantage of this opportunity. The State must generate economic instruments that create incentives in the productive sector to advance this vision of sustainable development. In particular, we must agree to an increase in the GHG tax well in advance so that stakeholders can plan their investments and at the same time generate mechanisms to support innovation and investment to accelerate the energy transition. The State can play a key role in promoting green technological innovation, facilitating access to financing and generating public-private alliances, promoting a development strategy with a deep and motivating meaning, especially for the younger generations who will suffer to a greater extent in the future. the consequences of climate change.
The electrification of the world economy to substitute fossil fuels, the requirements of sustainable traceability and corporate environmental responsibility, generate a historic opportunity for us to develop businesses and attract investment that make a contribution to global climate action, with a virtuous effect of sophistication of our productive apparatus, with a significant impact on growth and quality employment.