Climate change is becoming a hot topic, both for Australia and the world. Despite the challenges in the international arena of negotiations, one thing is clear: tackling greenhouse gas (GHG) emissions will be, sooner than later, a public policy target in most jurisdictions around the world. Policy and regulatory frameworks affecting energy, mining and agriculture (among other activities) are already experiencing substantial changes. The grounds on which businesses have traditionally relied are likely to change accordingly.
From a business perspective, global environmental challenges such as a changing climate can pose greater risks and liabilities. By way of example, drastic changes in hydrological conditions may negatively affect a mining operation or, the imposition of a price on carbon may increase the operational costs of energy utilities.
By contrast, new environmental policies, plans and programs may provide the context for fostering new, innovative and sustainable business opportunities. For example, under Kyoto Protocol’s flexible mechanisms, Australian Companies may pursue GHG mitigation projects in Latin America, in order to obtain Certifications for Emission Reductions, which may be used for offsetting carbon dioxide (CO2) emissions back home. Accordingly, GHG mitigation strategies may imply interesting opportunities for Australian companies operating in Latin America.
Chile is both part to the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol to the Convention. Although Chile is not obliged to cap GHG emissions, the country has committed to reduce its carbon-intensity. Chile’s National Climate Change Action Plan provides insights on new opportunities for environmentally sustainable businesses. For instance, the Chilean Development Agency’s (CORFO) implements initiatives for supporting non-conventional renewable energies and energy efficiency projects. In a likely manner, Chile has set a national renewable energy target, in order to mitigate the increasing carbon-intensity of Chilean economy.
Finally, it is worth mentioning that sustainable development is at the core of Chilean-Australian trade and investment relations: achieving sustainable development is one of the aims of the Australia-Chile Free Trade Agreement. [1]
In HGG, we advise our clients on the challenges and opportunities related to new policy developments. Please feel free to contact us for additional information.
Pablo Schatz is a consultant in Harris Gomez Group Environment & Natural Resources Practice Group. Prior to joining the firm, he worked at the Environmental Protection Agency for the City of Buenos Aires. He has experience advising NGOs both in Argentina and Australia, and he worked in a leading boutique law firm in Buenos Aires.
