Chile Becomes First South American Nation to Tax Carbon | Oceana
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October 6, 2014

Chile Becomes First South American Nation to Tax Carbon


Late last month, Chile became the first nation in South America to tax carbon dioxide (CO2) emissions. The new tax—$5 per ton of CO2 emitted—targets 50 megawatt or higher fossil fuel-emitting power plants, while smaller plants and those fueled by renewable sources will remain exempt. Most of the funds will go into Chile’s education system, says Blue and Green tomorrow.

About 80 percent of Chile’s energy comes from fossil fuel resources, so the move comes in an effort to force power plants to use cleaner energy resources as Chile works towards a voluntary goal to cut greenhouse gases by 20 percent from their 2007 levels by 2020. Four companies—Endesa, AES Gener, Colbún, and E.CL—are expected to contribute the most to the tax, estimated to bring in about $160 million in revenue as part of a larger tax reform, says Reuters.

Chile follows in Mexico’s footsteps with the carbon tax, which created a tax on the sale of fossil fuels earlier this year. Costa Rica also has a version of an environmental tax.

Oceana in Chile has worked on this issue, actively campaigning to create renewable energy sources around Chile and stopping new coal-fired plants from opening. Oceana also works to stop further environmental degradation of “sacrifice zones,” areas where power plants are concentrated together and cause excessive pollution—typically in areas of poverty. Click here to learn more about Oceana in Chile’s work.