Chile is extremely susceptible to climate change due to its geography that extends to the north into the Atacama Desert and to the south into glaciers. An increase in temperatures, a mega-drought that lasted ten years, and massive wildfires that consumed more than 430,000 hectares in 2023 have strained water systems, energy provision and human health.

These problems put the climate action on the national policy agenda. Chile has incorporated climate targets in the energy planning and development of infrastructure in the last 10 years. Electricity is currently produced in renewable sources at approximately 70 percent and the country is among the top ten in the world with regard to climate policy performance, a change founded on vulnerability to long term resiliency.

This gave rise to a straightforward point of policy, that the environmental stress was as much an economic, health and infrastructure issue as it was a project issue, and it needed system-level solutions, not project-level ones. This reframing is the single most important pivot behind the country’s recent strategy and sets the tone for everything that follows.

Institutionalisation and long-term orientation:

Initial intervention started with pilot projects on renewable energy and transport to evaluate the feasibility of bringing about large-scale change. These consisted of large-scale solar parks in the Atacama Desert, the first wind farms in coastal areas, and the first electric buses in Santiago that proved that clean energy and transport could be reliable and cheaper in the long term. After these pilots had been successful, the government took the next action of securing progress in to a permanent system.

 A law on national framework was established to have long term targets, to have periodic planning across sectors and to have continuity even when there is a shift in the political system. This was consolidated with a 4 year long Net-Zero Nature-Positive Accelerator programme which coupled reduction of emissions with ecosystem protection and enhanced coordination between ministries. In practice, short-term experiments were transformed into a long-term and stable policy framework.

Policy instruments and flagship initiatives — what was implemented and how it works:

Solar and wind fast renewable development.

• Rationale: Substitute imported and volatile fuels as well as climate-sensitive hydropower with vast domestic renewables.
• Mechanism: Utility-scale solar farms in high-insolation northern regions plus large coastal and inland wind parks feed the grid via competitive auctions and long-term power purchase agreements. The portfolio method combines intermittent PV and dispatchable sources and storage in order to stabilise supply. Renewables have taken off to form the major portion of electrical generation, both of policy formulation as well as market economics.

Cerro Dominador — solar thermal with storage

• Rationale: Demonstrate that solar can provide dispatchable, baseload-like power.
• Mechanism: The facility is a 100 MW photovoltaic farm, 110 MW molten-salt thermal-storage-based concentrated solar power (CdTe) plant. The heat stored allows the generation of electricity after the sun goes down, which will solve the problem of intermittency and lower the fossil backup requirement. Being an industrial scale demonstration, it gives some indication that high-penetration renewables are capable of being coupled with storage to provide grid stability.

Electric mobility at scale — e-buses and urban electrification

• Rationale: Reduce the air pollution and diesel addiction in the city and decarbonise transportation.
• Mechanism: High value procurement programmes and subsidies have boosted the use of zero-emission buses; Santiago is on a roll-out on an aggressive timetable that will see it end up with one of the biggest electric bus fleets. Public transport can be electrified on a large scale, and thus, the level of particulate pollution is lowered and the costs of such operations become cheaper to municipalities.

Sequenced coal retirements

• Rationale: To avoid abrupt energy unavailability, inflation, and unemployment as we abandon energy sources that are extremely polluting.
• Mechanism: The coal plants are shut down in a systematic sequence with the oldest and most polluting plants shut first, capacity is added to renewable energy and grid upgrades and storage is added in advance to keep electricity supply unchanged throughout the transition.

Integrated mitigation–adaptation planning & nature-positive action

• Rationale: Avoid the historic separation between resilience and mitigation; treat ecosystems as active components of national strategy.
• How it works: The process of methodological frameworks and transparency now demands sectoral plans to determine measures that not only mitigate emissions but also make the sector more resilient such as restoring river basins which can store more water and capture carbon or creating urban green areas which can reduce heat stress and absorb carbon. These linkages are operationalised through a specific Net-Zero Nature-Positive Accelerator fund which cross-cuts programmes.

Emerging industrial strategy — clean hydrogen ambitions

• Rationale: Convert abundant renewables into exportable low-carbon fuels and industrial feedstocks.
• How it works: A national green hydrogen approach aims to increase the scale of electrolyser and draw foreign direct investment into the country, by making it a regional hydrogen producer and establishing new value chains to supplement domestic decarbonisation. The export potential is pointed out at early projects and interest of the investors; the commercial scaling of projects and FIDs are still in progress.

Financing Architecture and Investment Mobilisation:

• Policy level integration is funded by Global Environment Facility (GEF) under a USD 5.3 million programme which is implemented with the UN Environment Programme (UNEP).
• A catalytic role is played by public funding through financing planning, regulation, and support of public transport.
• Most of the large renewable and infrastructure projects are mostly delivered on a PPP basis and as a result of private investment.
• The executive funding partners are the Inter-American Development Bank (IDB), World Bank Group, European Investment Bank (EIB), and the private companies like Enel Green Power and AES Andes.

Has all this brought about any tangible change?

• Electricity mix: The percentage of electricity produced by wind and solar energy has increased exponentially and now constitutes a huge percentage of the grid supply with national governments aiming to achieve an even higher share by the year 2030. Such a shift has decreased the fossil-fuel imports and has enhanced resiliency in energy.
• Coal retirements: More than 1.2 GW of coal capacity has been retired since 2019, and more closures have been announced based on grid readiness and replacement capacity.
• Dispatchable solar evidence: PV and thermal storage (CdCl2/molten salt) plants are supplying dependable evening power, and are alleviating system integration issues.
•   Urban logistics influence: Massive electrification of bus networks and approved low-carbon transit infrastructure are reducing urban-scale emissions and enhancing air quality in the biggest cities. The programme of Santiago to raise the number of EV buses to several thousand will provide a noticeable reduction in the exposure to the particulate matter.
•  International recognition: The better the international performance indexes on climate are, the more believable are the policy design and quantifiable gains, which strengthens the investor and diplomatic trust. Collectively, these results indicate that the strategy is shifting away from symbolic action to the systemic change: energy, transport, land and finance are being redefined in order to produce low-carbon resilient results.

Public, Stakeholder and Investor Response:

• Where policy interventions have yielded tangible, visible co-benefits and especially where these improvements have been in urban mobility, air quality, and energy security, policy acceptance has risen.
• Implementation of electric buses (more than 2,000 units) has improved consumer satisfaction and health status of the population, which supports the idea of the further electronification and investments in clean transport by the citizens.
• The electricity generated by renewable sources taking approximately 70 per cent of the generation has minimized exposure to fuel price fluctuation which has been positively taken by households and other energy consuming industries.
• As far as stakeholders are concerned, the sub-national governments and the municipal authorities have reacted in a positive manner to the more explicit policy requirements, consistent planning schemes, and the availability of co-financing schemes. The reaction of investors has been quite high, and it is backed by the assurance of policies, long-term goals, and plausible regulatory structure, which have decreased the perceived risk in the renewable energy and infrastructure projects.
• The international respect, namely the fact that Chile has always ranked high in the global rating of climate policies, has served to further build the confidence of investors because they are a sign of an institutional reliability and continuity of commitment.
• All in all, citizen, public and investor support has been coalescing around the belief that climate action brings about economic resilience, improvements in the quality of service delivery, and the credibility of long-term policy, as opposed to symbolic environmental benefits.

The case demonstrates the fact that climate action can be integrated into the basic operation of the state, as opposed to being an environmental agenda being pursued on a parallel basis. The strategy focuses on consistency rather than speed, focusing the same emphasis on the institutional design, the sequence of policy and the capacity to execute it. The strategy establishes interconnections between sectors so that decisions in energy, transport, land use and finance can support each other rather than using one off interventions.

One of the main lessons is the way of managing uncertainty. The transition prevents the abrupt disruption and keeps the momentum going by trying the ideas first before committing them to the formal planning structures and aligning the financial incentives to long-term goals. This has been a flexible-stable balance that has facilitated continuity amid changes in administration and the political arena.

In a larger sense, the case provides an example that climate policy can be made more permanent when it delivers functional value, i.e., predictability to investors, clarity to public institutions, and reliability to citizens. When the goals of the environment are sought with plausible governance structures and they are incorporated in daily policymaking, they become more than mere symbolism and are included in the long-term development strategy.