green taxes in chile - acuerdochilecanada.mma.gob.cl · gobierno de chile | ministerio del medio...

Green Taxes in Chile

Ministerio del Medio Ambiente y Superintendencia del Medio Ambiente

Gobierno de Chile | Ministerio del Medio Ambiente

Context

• Chile has significant

environmental problems

– Climate Change

– Atmospheric pollution

– Congestion and motor vehicle

pollution.

• Environmental policy is

centered on standards and

regulations.

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% Change in GHG emissions, 2000-14

Chile had one of the highest increases in GHG in the OECD

Source: OECD (2016), "Greenhouse gas emissions by source", OECD Environment Statistics (database).


0 200 400 600 800 1000 1200

EstoniaAustralia

PolandIsrael

GreeceJapanKorea

Czech RepublicMexico

United StatesGermany

Chile

gCO2/kWh

Carbon intensity of electricity production, 2014 Emissions of CO2 per unit of electricity generated

The carbon intensity of power generation is high

Source: IEA (2015), IEA World Energy Statistics and Balances (database).

OECD


0

10

20

30

40

50

60

70

80

90

2000 2002 2004 2006 2008 2010 2012 2014

Mto

e

Electricity generation by source

Renewables

Natural gas

Oil

Coal

Power production from fossil fuels increased twice as much as from renewables

Source: IEA (2015), IEA World Energy Statistics and Balances (database).


A large share of the population is exposed to severe PM2.5 pollution levels

0% 20% 40% 60% 80% 100%

OECD

BelgiumIsrael

LuxembourgNetherlands

KoreaHungary

Czech RepublicGreeceTurkeyPoland

SwitzerlandItaly

Slovak RepublicGermanySlovenia

JapanAustriaFrance

SpainUnited Kingdom

CanadaMexico

CHILEUnited States

DenmarkPortugal

EstoniaFinland

SwedenIreland

NorwayNew Zealand

IcelandAustralia

Less than 10 µg/m3

10 µg/m3-35 µg/m3

More than 35 µg/m3

Source: OECD (2016), OECD Environment Statistics(database).


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100

120

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500

1.000

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2.000

2.500

3.000

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4.000

4.500

5.000

2000 2002 2004 2006 2008 2010 2012 2014*

2005=100 Thousands vehicles

Vehicle fleet and transport-related NOx emissions, 2000-14

Goods vehicles

Buses

Vans, minibuses

Passenger cars

NOx emissions from roadtransport (right axis)

* Provisional data

The vehicle fleet has doubled since 2000, increasing air pollution

Source: INE (2015), Anuarios parque de vehiculos en circulacion; OECD (2015), OECD Environment Statistics (database).

• In September 2014, Chile passed a General Tax Reform Bill (Ley 20.780) with 3 green taxes.

• Three new taxes were introduced:

– tax on CO2 emissions from stationary sources with boilers and turbines (sum over 50MW)

– tax on local contaminants also on stationary sources with boilers and turbines (PM, SO2 and NOX).

– tax on the first sale of new cars considering the expected NOx emissions over their lifetime.

Green taxes

•$5 USD/Ton CO2. Carbon tax

• Tij = O.1*CCAj x CSCpci x Pobj Local Pollutant’s tax

(SO2, NOx and PM)

• T (in UTM) = [(35/urban performance (km/lt)) + (120 x g/km of NOx)] x (selling price*0,00000006)

Mobile sources tax

Air quality Social cost Population

Taxes


Local Tax formula

• Example: Puente Alto PM: 0.1*1,2*0.9*625,555

Saturated Zone Latent Zone

CCA 1,2 1,1

Contaminante MP SO2 NOX

Social Cost (US$) 0,9 0,01 0,025


Example Local Tax

Comuna CCA MP US$/ton SO2 US$/ton NOx US$/ton

PUENTE ALTO 1,2 67.560 751 1.877

MAIPÚ 1,2 60.385 671 1.677

ANTOFAGASTA 1,0 35.083 390 975

SAN BERNARDO 1,2 32.780 364 911

TEMUCO 1,2 31.594 351 878

CONTULMO 1,0 495 6 14

QUEILÉN 1,0 500 6 14

PORTEZUELO 1,0 506 6 14

COBQUECURA 1,0 510 6 14

CORRAL 1,0 519 6 14

MARÍA ELENA 1,2 523 6 15

MELIPEUCO 1,0 524 6 15

Law 20.780

Regulatory Statute (30 dic 2016)

Measurement Protocols (SMA)

Notification of Facilities (MMA)

Registration System (RETC)

Development of a System of Reportin (SMA)

Design of a Verification System (SMA)

Green Tax Implementation

Green Tax - Estimates

CO2 85%

MP 10%

NOX 3%

SO2 2%

% Revenue - contaminants

Generadora 90%

Celulosa/Papel 3%

Agrícola 3%

Refinería 2%

Pesquera 2%

Químico 0,30%

Siderurgia 0,24%

Maderero 0,04%

Cervecera 0,03%

% Revenue by Sector

0% 20% 40% 60% 80% 100%

Cervecera

Maderero

Químico

Siderurgia

Celulosa/Papel

Pesquera

Refinería

Agrícola

Generadora

% Recaudación - Sector y contaminante local

MP

NOx

SO2

Ministry of Finance Financial Report

Revenue USD 170 MM aprox.


GHG Inventory (2013)

CO2 tons (mm)

Tax (2016)

Energy 85,1

Generation 38,5 40

Industry 14,3 2,5

Others 32,3

Industrial Processes 6,6

Agriculture 13,7

Waste 4,5

Total 109.9

• Tax supports mitigation policy

• But perhaps

• Builds new institutional infrastructure that will boost our monitoring, reporting and verification capabilities.

– By upgrading Chile´s reporting capacity in the future it will be possible to develop more sophisticated policy instruments.

– Although this bill does not include ‘offsets’ after the full implementation of the tax it will be possible to introduce offsets if the authorities consider it appropriate.

Conclusion

Thank You

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