By Mathew Carr
What surprises me about the below numbers is that Chile seems to be able to get to net zero for about half the price per ton of carbon dioxide equivalent (social cost apparently assessed at $32/ton), vs current market prices ($64/ton) in the EU carbon market, the world’s biggest by traded volume.
This underpins a truth that the world should focus on cutting Chile’s emissions, because doing so reduces double the emissions for the ‘same cost.’ Another truth of course is that all emissions in every country need to be cut dramatically and urgently over the next seven years through 2030 and beyond.
What’s surprising is a country can spend $50 billion and get a $30 billion return….(an $80 billion gain from the $50 billion).
Crucially, this section of the document appears to be missing:
“(3) Assessment of the co-benefits of the Coal Plant Closure Plan in Chile [EXP.3]”
Chile report published by the UNFCCC (Unedited excerpt)
Implementing the package of mitigation measures committed by Chile to achieve carbon neutrality by 2050 is not only profitable and cost effective from the point of view
of (a) direct net benefits in GHG reduction, it is also necessary to consider (a) the benefit of reducing damage due to the effect of climate change, namely social costs, as well as (b) the health benefits of reducing local pollutants associated with reducing greenhouse gas emissions.
(a) The implementation of the mitigation measures defined with the objective to achieve carbon neutrality by 2050, implies in net present value significant investment costs (CAPEX) of the order of USD 50,000 million; while the costs associated with operation and maintenance (OPEX) are in savings due to lower energy consumption in the carbon scenario neutrality, of the order of USD80,000 million, thus achieving a net benefit of the order of USD30,000 million by 2050. Therefore, from the point of view of cost-effectiveness, the measures are profitable. The cost calculations were carried out by the Ministry of Energy, the Ministry of Finance and the Ministry of the Environment in the context of the definition of the carbon goal neutrality by 2050 and the update of the NDC, with a discount rate of 6%.
(b) The direct valuation of GHG reductions according to the social price of carbon (MIDESO, 2017) reaches USD 9,048 million value, considering a social price of carbon of 0.823 UF/ton CO2 (estimated in 32 USD/ton CO2)
(c) The social benefits from reducing emissions of local pollutants at the national level reach USD29,482 million. The results show the relevance of the cases of premature deaths avoided, which are equivalent to USD 28,078 million and represent 95% of the total benefits. On the other hand, hospital admissions represent 1% and lost productivity 3.5% of total benefits.
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