Chile Leads Latin America in Paris Agreement Carbon Reduction Project
Chile has taken a significant step in battling climate change, becoming the first Latin American and Caribbean nation to approve a carbon reduction project under Article 6.2 of the Paris Agreement. The project, a collaboration with Switzerland, involves replacing a coal-fired boiler with a biomass system in Chile's Nuble Region, reducing greenhouse gas emissions.
The project, part of a bilateral cooperation agreement signed in December 2023, is designed to support Chile's 2030 Agenda and Sustainable Development Goals. It aims to provide environmental gains and economic incentives to shift away from fossil fuels. The Nuble project was reviewed to ensure it meets high standards of additionality, transparency, and environmental and social integrity. Switzerland is expected to invest up to $100 million in Chilean clean-energy and industrial modernization projects through this mechanism. Effective implementation of Article 6 could unlock billions in private investment for climate projects across developing economies.
By partnering with Switzerland, Chile has positioned itself as a regional leader in operationalizing Article 6 of the Paris Agreement. The project's climate benefits are additional to those already committed in Chile's Nationally Determined Contribution (NDC). Switzerland will fund the project in exchange for Internationally Transferred Mitigation Outcomes (ITMOs) to count towards its national climate targets.
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