Setting Emissions Reduction Targets in a Long-term Strategy: The Chilean Experience

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1 Setting Emissions Reduction Targets in a Long-term Strategy: The Chilean Experience Marcia Montedonico, Head of Socioenvironmental Development Area, Energy Center, University of Chile Rodrigo Palma-Behnke, Associate Professor, Department of Electrical Engineering, Energy Center, University of Chile, Director of SERC (Solar Energy Research Center) Chile All the interpretations and findings set forth in this expert perspective are those of the authors alone. The observations below were provided by Rodrigo Palma-Behnke and Marcia Montedonico, in writing, in response to questions posed by the project team. The answers are based on their experience in several participatory processes regarding energy and climate change in Chile. In this sense, their opinions do not claim to have general validity but instead express only what the authors observed and studied in this particular context. Q1. What do you view as the advantages and disadvantages of including a quantitative mid-century emission reduction target? A target for when to reach net zero emissions? In general, quantitative goals help us specify and clarify what we seek, our intent, and its magnitude. They also facilitate the monitoring of progress made and the adaptation of strategies during the process. A clear quantitative goal also facilitates informed discussion of its costs and feasibility. Quantitative goals can be considered arbitrary, however, if there is no support for them from key decision makers and the general public. Likewise, these types of goals can be considered rigid if they didn t take into account the broader context. Regarding emission reduction targets or a date to achieve zero net emissions, we can make the following observations: If quantitative goals are perceived as very ambitious, they can come into conflict with other societal priorities. For example, in Chile we often heard the argument that a zeroemission medium-term goal would undermine the country s development or divert resources from other national priorities. In contrast, qualitative or more general goals would facilitate adjustment of efforts based on changes in costs, technological developments, and so on. However, in this case the goal is diluted and the sense of urgency of attaining it is lost. 78

2 Finally, it should be mentioned that quantitative goals do not ensure objective analysis (without any doubt as to its application). In the case of Chile, at least five different ways of establishing objective goals were discussed, which resulted from a combination of three factors: the reference year selected the basis for the calculation of emissions intensity (population, GDP, etc.) the expression as absolute or relative value Even in the case of zero net emissions, the sectoral distinction appears: for example, only the electricity sector or global emissions. Q2. What are the advantages and disadvantages of calling such a goal post a target? What are the implications if these are called targets explicitly vs. goals or vision for emissions reductions to be achieved, or some other type of language? Target differs from other concepts such as objective or goal in that it is perceived as having greater urgency, greater precision, and as entailing systematic monitoring. In general, target should be used for results that can be measured and perceived. A negative aspect is that targets are perceived as having greater rigidity. In our opinion, the average temperature of the planet, directly associated with the planetary target, is not yet of sufficient magnitude for societies to internalize it. It is a different matter for economic indicators such as GDP or percentage of school coverage, percentage of access to electricity, and so on. The word target is probably most effectively associated with a visible measurement by society of average temperature. To the general public, it seems to be clearer to talk about a net zero emission target, or about associated topics such as risk of extreme events, level of threat to biodiversity, and so on. For its part, goal refers more to an ambition, a purpose or intention of a country (or the international community) to achieve certain results. Its meaning is more political than technical. In this sense, it could better guide the country s objectives, leaving the word target for more specific and concrete goals that are more easily measured and attained. Q3. Should countries include both midcentury (2050) emissions reduction targets as well as a target date for achieving net zero emissions in their long-term strategy? The Paris Agreement calls for midcentury strategies, but also calls for such strategies to be mindful of Article 2 which references a balance between anthropogenic emissions and removals (i.e., net zero emissions). Under the assumption the preference is for quantitative targets (dates, amounts), it seems advisable to establish intermediate goals based on a final goal. This has the following advantages: Given that these are long-term goals, involving several governments (per its reference to global goals), this approach avoids the perverse incentive to shift commitments toward the end of the period, which would make its achievement more complicated as time progresses. Progress toward achievement of the target could be monitored more consistently, establishing a kind of trajectory. Under this approach, the narrative associated with each trajectory must develop a road map that facilitates the achievement of commitments within each country (sectors) and in international agreements. The intergenerational commitments in a society would be evident, since sacrifices would be made and benefits realized in the different stages. On this point we would like to offer more general thoughts on the goal of net zero emissions. Given that the ultimate scope of this goal is planetary, when it is defined for each country, a complexity emerges, in that the goal does not seem to capture the options for the different countries to focus their contribution according to their vocation (natural advantages, economic circumstances). For example, Setting Mid-Century Emissions Reduction Targets to Achieve Net-Zero Emissions 79

3 Chile, with a huge renewable energy potential, could become a major exporter of solar energy to the rest of Latin America. Other countries in the region could receive the benefits of this clean energy from Chile. How is this contribution recognized in moving toward the goal? At the same time, Chile could continue with high transport emissions, pending the development of efficient technology in this sector, an effort that would be led by another group of countries as a multilateral commitment. In this case Chile would be the recipient of these benefits. Investment in mitigation strategies generates benefits for the country even in conventional indicators of development such as increased GDP, job creation, and job quality. It thus seems to us that the successful definition of final and intermediate goals should involve multilateral commitments according to each country s strengths and comparative advantages (in terms of mitigation opportunities). Each country s goals in themselves would seem to configure a suboptimal situation that could increase the perceived risks. More than a negotiation process around multilateral commitments, countries should study efficient incentives to promote this type of association (better access to green funds, the possible creation of common pathways, etc.). Q4. For the midcentury target, is it preferable for countries to set a single target or a range of emissions reductions that could be achieved? For the timing to achieve net zero emissions, how important is it to set a single date versus a range of dates? We think that in general, ranges in emissions or years can perversely encourage countries to align efforts and resources with the less restrictive limit. If it is already difficult to establish (largely reputational) costs of noncompliance with a specific goal, it will be even more complicated to determine effective responsibility for achieving a goal at either end of the established range. Alternatively, it would seem to make more sense to periodically review the established goals (say, every five years) in a participatory and transparent process that allows negotiation according to the performance observed in each country. Q5. Is it better to set an aspirational target that you may not know how to reach versus a target that is less ambitious that you know how to reach (e.g. through existing technologies) while noting the potential for increasing ambition over time? The dilemma suggested here is quite complex, and we fully share the concern. However, as scientific evidence about the climate change process advances, it seems that a deadline can be estimated for stopping the growth of emissions according to a specific scenario. The goals (dates) would thus have a maximum value that cannot be exceeded. Even simulation models can check these maximum dates (or deadlines) according to the evolution of the intermediate goals. If countries respected these maximum dates in the context already described, the key question would focus on the intermediate goals. Probably here it could be discussed whether it is best to set these as aspirational targets or directly as targets. A feasible hybrid solution would be to set a quantitative target for the year to achieve zero net emissions, while defining the intermediate goals as aspirational targets, expecting higher levels of ambition than for the fixed goals. 80

4 Q6. How should the long-term goals of the Paris Agreement inform the development of goals in the long-term strategy? Should countries define what the Paris temperature goals mean to them in the context of developing their strategies? The Paris Agreement s goals are key as a point of reference. It is not clear to us whether this agreement is sufficient to establish a final goal in terms of years (see our answer to Question 5). In the event that it is not, it seems necessary to continue with scientific efforts (simulations, models) that support the topics in the strategies of each country. In addition, it is important to standardize the definitions and strategies drawn up in each country with respect to the Paris temperature goals, so that agreements converge. In this respect, it can greatly help to use simulation models that show countries the ranges of uncertainty in the achievement of temperature goals, depending on what they define and what other countries define. What we are suggesting is not an exact calculation but rather a range of the results uncertainty. Q7. Is it possible to say whether a long-term target in a national long-term strategy is consistent with the Paris Agreement longterm goals, given that the temperature goals will be determined by global emissions? Here again we see the need for an adequate framework that shows how national commitments translate into planetary-level effects. We view it as a necessary cross-check. The timing of this check is key, since a specific agreement from the set of countries could meet standards for each country, but not global goals. A simulation tool is also needed. It would allow a less detailed but more permanent check that helps create the notion of consistency and coherence in countries joint efforts. In this sense it is worth mentioning part of Chile s experience in the MAPS Chile project (Mitigation Action Plans and Scenarios). Sectoral and macroeconomic models were developed that allowed the evaluation of different mitigation scenarios that contained an implicit strategy. The development of these models took several years: the simulation of the cases was a relatively complex process due to the amount of information and analysis required. When national commitments were defined, almost a year after the analysis of the model results closed, the international and national economic context changed significantly, bringing pressure to review the results of the models and eventually rerun them. This proved not to be feasible. The experience led us to think about the importance of having a good balance between precision and flexibility in future models, in order to better time our informing of decision makers, thereby reducing the risk of model results being invalidated. If we believe that the social and technological context continuously improves in relation to the commitments each country can take, it is important to have periodic evaluations. For example, in the Setting Mid-Century Emissions Reduction Targets to Achieve Net-Zero Emissions 81

5 last five years Chile has experienced a boom in renewable energy, resulting in the incorporation of about 3 GW (out of 21 GW total installed capacity) of solar and wind energy. Recent tenders have validated record offer prices of less than US$25/ MWh. Society today relies much more on the contribution of these technologies and does not perceive them as an additional cost, as it did five years ago. A higher level of commitment therefore seems much more feasible. We believe that each country will perform an analysis focused on its context, since it will be key to know how the national strategy, combined with those of other countries, meets or fails to meet the final target of zero net emissions, an understanding that will enable the proposal or revision of global agreements. Q8. What are the important assumptions to disclose regarding how the target was established (equity criteria (assumptions about other countries actions), technology assumptions, inclusion of negative emissions, etc.)? On the target itself (inclusion of the land sector, inclusion of all sectors and greenhouse gases, etc.)? Assumptions about equity criteria, technologies, incorporation of negative emissions, and so on, will always be debatable, as will the way of calculating the target. The support given to the simulations (in their different levels of stakeholders) must generate the conviction that the calculated value is reasonable for all. Since it is a long-term target, we think that a resolution of less than five years is not required, which probably captures a significant part of the uncertainties involved. This could be done by taking a representative year of each five-year 82

6 period and explaining the structural changes and mitigation results achieved. Intermediate strategies do not seem to be necessary and would complicate a process of validation and analysis. It should be noted that the most conservative assumptions in each of the mentioned aspects would have the impact of advancing the zeroemissions target date. Likewise, these conservative assumptions would generate less debate since they are more similar to a BAU perspective. If this date is accepted as a target for zero net emissions, the intermediate goals would have to be adapted consistently in each country. Assuming that the context would tend to improve, in each revision process it should be easier to reach binding agreements with more specific strategies. We do not necessarily suggest starting from the BAU perspective and then adjusting the process. What we want to stress is that if agreement is reached on zero net emissions within this century, the BAU assumptions when simulated would force the maximum year for reaching that goal to be before expected if there not be zero net emissions agreement. This provides an incentive to move the BAU perspectives in order to have more flexibility regarding the date one wishes to commit to as a limit. If it is feasible to explicitly incorporate the land sector, we believe that this would be helpful, particularly in countries where this sector offers great potential (Brazil, Chile, etc.). In these countries afforestation, forest management, and desertification are challenges directly linked to climate change goals. We believe that efforts to foster greater understanding of the climate change phenomenon will always have a positive effect on the process of agreement among countries. However, in the case of the models used in each country, it is essential to maintain an adequate compromise between the models precision and their versatility. Q9. If a country has already established a long-term target, to what extent should the long-term strategy development be an opportunity to revisit this target and set a new target? Or should targets be set in another political process, and the longterm strategy be limited to exploring the pathways for achieving an existing target? Our perception is that one cannot generalize sufficiently to answer this question. For better or for worse, the agreements reached, such as that of Paris, should be managed from the point of view of a longterm decision triggering global processes that take time to become established. Undoubtedly, countries that, in view of the new scenario, are willing to revise their long-term target commitments and explore more ambitious pathways should be able to do so under the official structure. The processes of global review of the long-term target, which in turn should trigger new pathways, should correspond to periods of five years or more. Finally, we would like to comment on the intergenerational challenge posed by climate change. The mitigation scenarios explored in Chile, particularly those with a high level of ambition, show that investment in mitigation strategies generates benefits for the country even in conventional indicators of development such as increased GDP, job creation, and job quality. The first generation may not see the results in the short term, however, and may perceive the strategy more in terms of costs. This is a particularly important point in developing countries, where development priorities are critical in basic areas. South-South- North (multilateral) cooperation strategies can play a key role in this context. Setting Mid-Century Emissions Reduction Targets to Achieve Net-Zero Emissions 83