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Environmental Policy, Fuel Prices, and the Switch to Natural Gas in Santiago, Chile

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Jessica Coria
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This discussion paper analyzes the role of environmental policies and energy cost savings in the switch to natural gas by stationary sources in Chile. According to the data cited, switching to natural gas is, overall, a response to changes in relative fuel prices, instead of a response to the consequence of various environmental regulations involving both command and control and market-based policies. However, environmental policies played a small role and showed that sources were more sensitive to the cost of energy than to environmental regulation.