100 Luis E. Gonzales Carrasco and Rodrigo Cerda
while LIHC could show that the middle class has a higher risk of fuel poverty.
The variations are due to the different costs associated with different energy
fuels. For instance, households spend less on low- cost biomass in southern
regions versus higher costs of solar power in other regions (see Gonzales, 2018).
Currently in Chile, there are no considerations to assess fuel poverty within the
different thermal zones and different household income levels. More studies are
needed in order to explore the impact of renewable electricity on energy poverty
as the climate continues to change and more households will need to adjust to
the changes. The burden of the costs will need to be carefully considered and
the risks of energy poverty mitigated before rolling out policies.
In summary, successful implementation of a low- carbon pathway will place
pressure on household budgets, as energy costs will rise. Any of the possible
scenarios would change both actual and desired spending decisions on energy
and other essential items in individual households – what we call their ‘preferences’. Many household preferences cannot be directly observed, but we consider that an economic compensation, set by observed expenditure on energy
products, is the best proxy for the hidden preferences of these households. This
measure will not fit all the preferences of every household but it will at least
cover a significant proportion of them.
Other uncertainties and risks
The policy complexity at the intersection of economics, energy, and environment may give rise to uncertainties, and under these some identifiable risks
related to the promotion of renewable energy in Chile which go beyond the
consequential risk posed by energy poverty. They have not been quantified but
are the result of stakeholder engagement processes including focus groups.
We understand the uncertainty as a lack of information about possible results
or stages after policy implementation. In this case the uncertainty, identified by
the stakeholders’ discussion around scenarios of mitigation for a low- emissions
economy, is nested in the behaviour of citizens in cultural and social demands
towards the promotion of renewable energy.
This unpredictable behaviour of the citizens regarding the promotion of
renewable energy is contrasted by actual positive positions to renewal technologies in regions far away from solar or wind farms, and contrasted by the opposition observed in some regions of the country where they host these farms. A
good example of this contradictory behaviour is the opposition to wind farms in
the south of Chile, specifically in Chiloe. This kind of manifestation opens the
door for doubt about the performance of the renewal sector in the future. While
there is an increasing willingness to adopt new and clean technologies, other
kinds of considerations, like the beauty and quality of landscapes, also play an
important role in the subjective valuations of society.
At the same time, a cultural change also brings uncertainty around the feasibility of the promotion of the renewable energy as an instrument of alleviating
negative externalities in climate change policy. A good example of this is the
while LIHC could show that the middle class has a higher risk of fuel poverty.
The variations are due to the different costs associated with different energy
fuels. For instance, households spend less on low- cost biomass in southern
regions versus higher costs of solar power in other regions (see Gonzales, 2018).
Currently in Chile, there are no considerations to assess fuel poverty within the
different thermal zones and different household income levels. More studies are
needed in order to explore the impact of renewable electricity on energy poverty
as the climate continues to change and more households will need to adjust to
the changes. The burden of the costs will need to be carefully considered and
the risks of energy poverty mitigated before rolling out policies.
In summary, successful implementation of a low- carbon pathway will place
pressure on household budgets, as energy costs will rise. Any of the possible
scenarios would change both actual and desired spending decisions on energy
and other essential items in individual households – what we call their ‘preferences’. Many household preferences cannot be directly observed, but we consider that an economic compensation, set by observed expenditure on energy
products, is the best proxy for the hidden preferences of these households. This
measure will not fit all the preferences of every household but it will at least
cover a significant proportion of them.
Other uncertainties and risks
The policy complexity at the intersection of economics, energy, and environment may give rise to uncertainties, and under these some identifiable risks
related to the promotion of renewable energy in Chile which go beyond the
consequential risk posed by energy poverty. They have not been quantified but
are the result of stakeholder engagement processes including focus groups.
We understand the uncertainty as a lack of information about possible results
or stages after policy implementation. In this case the uncertainty, identified by
the stakeholders’ discussion around scenarios of mitigation for a low- emissions
economy, is nested in the behaviour of citizens in cultural and social demands
towards the promotion of renewable energy.
This unpredictable behaviour of the citizens regarding the promotion of
renewable energy is contrasted by actual positive positions to renewal technologies in regions far away from solar or wind farms, and contrasted by the opposition observed in some regions of the country where they host these farms. A
good example of this contradictory behaviour is the opposition to wind farms in
the south of Chile, specifically in Chiloe. This kind of manifestation opens the
door for doubt about the performance of the renewal sector in the future. While
there is an increasing willingness to adopt new and clean technologies, other
kinds of considerations, like the beauty and quality of landscapes, also play an
important role in the subjective valuations of society.
At the same time, a cultural change also brings uncertainty around the feasibility of the promotion of the renewable energy as an instrument of alleviating
negative externalities in climate change policy. A good example of this is the