Chile plans tax on CO2 emission from thermal power plants

Chile’s new government elected in early March on Tuesday unveiled plans to set a carbon tax aimed at reducing carbon emissions from thermoelectric power plants.
Chile is the world’s leading country in copper production and many mines are powered by coal-fired thermoelectric plants. At UN climate summit in Copenhagen in 2009, Chile pledged to reduce its greenhouse gas emissions 20 percent below 2007 levels by 2020.
The proposal presented by Chile’s President Michelle Bachelet provides for a $5 per tonne of CO2 tax to be applied to to thermal power plants with a generation capacity equal or higher than 50 megawatts, according to Reuters. If approved by the Congress, the measure would be implemented by 2018 making Chile the second major economy in Latin America to resort to environmental taxation to discourage the use of carbon-intensive fuels. In January Mexico imposed a tax on several types of fossil fuels averaging 3 dollars per tonne of CO2.
Chile’s government presented the carbon tax as part of a broader taxation reform expected to increase tax take by $8.2 billion a year, of which $162 million generated by the carbon emission levy on thermoelectric plants.