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Environmental policy, fuel prices and the switching to natural gas in Santiago, Chile


  • Jessica Coria

    () (Pontificia Universidad Católica de Chile)


In this study I analyze the pattern of adoption of natural gas in Chile and the drivers behind it. For doing that I have a panel data set of stationary sources from 1995 to 2005 that allows me to identify either the role of environmental policy as the impact of the energy cost inducing the switching to this clean fuel. Besides, I evaluate the performance of the system of environmental contingencies, a non- traditional policy instrument created in Chile in the early nineties, that seemed strongly correlated with the switching. According to the data most of the adoption of natural gas was induced by the lower cost of this fuel, showing that sources were more sensitive to the cost of energy than to the environmental regulation.

Suggested Citation

  • Jessica Coria, "undated". "Environmental policy, fuel prices and the switching to natural gas in Santiago, Chile," Working Papers 200701, Latin American and Caribbean Environmental Economics Program.
  • Handle: RePEc:lae:wpaper:200701

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    References listed on IDEAS

    1. Lori D. Snyder & Nolan H. Miller & Robert N. Stavins, 2003. "The Effects of Environmental Regulation on Technology Diffusion: The Case of Chlorine Manufacturing," American Economic Review, American Economic Association, vol. 93(2), pages 431-435, May.
    2. Kiefer, Nicholas M, 1988. "Economic Duration Data and Hazard Functions," Journal of Economic Literature, American Economic Association, vol. 26(2), pages 646-679, June.
    3. Suzi Kerr & Richard G. Newell, 2003. "Policy-Induced Technology Adoption: Evidence from the U.S. Lead Phasedown," Journal of Industrial Economics, Wiley Blackwell, vol. 51(3), pages 317-343, September.
    4. Palacios, Milagros & Ch Vez, Carlos, 2005. "Determinants of compliance in the emissions compensation program in Santiago, Chile," Environment and Development Economics, Cambridge University Press, vol. 10(04), pages 453-483, August.
    5. Coria, Jessica & Sterner, Thomas, 2008. "Tradable Permits in Developing Countries: Evidence from air pollution in Santiago, Chile," Working Papers in Economics 326, University of Gothenburg, Department of Economics.
    6. Dagmar Nelissen & Till Requate, 2007. "Pollution-reducing and resource-saving technological progress," International Journal of Agricultural Resources, Governance and Ecology, Inderscience Enterprises Ltd, vol. 6(1), pages 5-44.
    7. Montero, Juan-Pablo & Sanchez, Jose Miguel & Katz, Ricardo, 2002. "A Market-Based Environmental Policy Experiment in Chile," Journal of Law and Economics, University of Chicago Press, vol. 45(1), pages 267-287, April.
    8. Blackman, Allen & Harrington, Winston, 1999. "The Use of Economic Incentives in Developing Countries: Lessons from International Experience with Industrial Air Pollution," Discussion Papers dp-99-39, Resources For the Future.
    9. Eskeland, Gunnar S & Jimenez, Emmanuel, 1992. "Policy Instruments for Pollution Control in Developing Countries," World Bank Research Observer, World Bank Group, vol. 7(2), pages 145-169, July.
    10. Requate, Till, 2005. "Dynamic incentives by environmental policy instruments--a survey," Ecological Economics, Elsevier, vol. 54(2-3), pages 175-195, August.
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    Cited by:

    1. Coria, Jessica & Sterner, Thomas, 2008. "Tradable Permits in Developing Countries: Evidence from air pollution in Santiago, Chile," Working Papers in Economics 326, University of Gothenburg, Department of Economics.
    2. Shen, Bo & Han, Yafeng & Price, Lynn & Lu, Hongyou & Liu, Manzhi, 2017. "Techno-economic evaluation of strategies for addressing energy and environmental challenges of industrial boilers in China," Energy, Elsevier, vol. 118(C), pages 526-533.
    3. Coria, Jessica & Jaraite, Jurate, 2015. "Carbon Pricing: Transaction Costs of Emissions Trading vs. Carbon Taxes," Working Papers in Economics 609, University of Gothenburg, Department of Economics.
    4. Jessica Coria & Xiao-Bing Zhang, 2015. "State-Dependent Enforcement to Foster the Adoption of New Technologies," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(2), pages 359-381, October.
    5. Mundaca T., Luis, 2013. "Climate change and energy policy in Chile: Up in smoke?," Energy Policy, Elsevier, vol. 52(C), pages 235-248.
    6. Di Falco, Salvatore, 2. "Economic Incentives for Pollution Control in Developing Countries: What Can We Learn from the Empirical Literature?," Politica Agricola Internazionale - International Agricultural Policy, Edizioni L’Informatore Agrario, issue 2.
    7. Jessica Coria & Clara Villegas-Palacio, 2014. "Regulatory Dealing: Technology Adoption Versus Enforcement Stringency Of Emission Taxes," Contemporary Economic Policy, Western Economic Association International, vol. 32(2), pages 451-473, April.
    8. Caffera, Marcelo, 2011. "The use of economic instruments for pollution control in Latin America: lessons for future policy design," Environment and Development Economics, Cambridge University Press, vol. 16(03), pages 247-273, June.
    9. Bonilla, Jorge & Coria, Jessica & Mohlin, Kristina & Sterner, Thomas, 2015. "Refunded emission payments and diffusion of NOx abatement technologies in Sweden," Ecological Economics, Elsevier, vol. 116(C), pages 132-145.
    10. Coria, Jessica, 2011. "Environmental crises' regulations, tradable permits and the adoption of new technologies," Resource and Energy Economics, Elsevier, vol. 33(3), pages 455-476, September.

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