High firewood consumption for heating produces high levels of pollution and energy poverty in cities in central and southern Chile, with serious consequences for health and life quality. Governmental programs designed to reduce wood smoke have failed, and air contamination worsen. Energy efficiency measures (EEMs) to decrease household energy needs have been identified as the best strategy to reduce wood smoke and maximize social benefits. However, EEMs are not a priority for most Chilean families. The objective of this proposal is to investigate the determinants of private investments in EEMs in South-Central Chilean households with the aim to find solutions to increase the adoption of these technologies and improve both the environment and welfare conditions of households. We will study: 1) the socio-economic benefits, environmental impacts and barriers of different types of interventions and policies; 2) the factors motivating households to invest in EEMs in their homes; 3) calculate the households’ willingness to pay to implement EEMs; 4) the different modalities and actors for the implementation and impact of the energy efficiency improvements, and 5) the design of different economic policies to incentive the private investments in EEMs. The results will present the necessary financial instruments and economic policies to encourage the adoption of EEMs in different socio‐economic groups in southern Chile. Besides, we will propose the necessary incentives to increase the rate of investment and promote further action to improve household energy efficiency.

To analyze the design and effectiveness of different financial instruments and economic policies focused on increasing the adoption of EEMs in South Central Chilean households

• Study households’ preferences for different types of financial instruments to implement energy efficiency measure. Specifically, the characteristics of these potential instruments.
• Propose the design of different economic policies to incentive the private investments in energy efficiency measures and suggest potential policy differentiation considering socioeconomic backgrounds.

Latin American and Caribbean Environmental Economics Program

Instituto Forestal