How are Chile and other Latin American countries currently supporting the energy transition in Europe?

“Foreign relations and diplomacy are being shaped by geopolitical interests in lithium and energy, leading to significant pressure in places like Chile, Bolivia and Argentina to increase resource extraction for export. My research into energy planning in Chile uncovered how energy and material extraction policy was prioritising export growth to support the energy transition elsewhere, rather than Chile’s own decarbonisation or energy needs. This energy policy focuses on how to develop the scale needed to export new commodities, principally green hydrogen and lithium, with the investment needed to make it a viable industry.

This export-oriented energy strategy has very little regard for domestic energy poverty or the need to reduce energy demand and consumption, instead leading to environmental conflicts and ignoring the concept of planetary boundaries.

Why has Chile chosen this energy policy?

“Chile’s energy policy was proposed with the promise that the benefits of growth would trickle down and bring about a green industrial revolution in Chile. The alternative would be to prioritise Chile’s domestic energy needs first. This would mean first re-organising production, and then developing the most appropriate exports and trade policies. But the opposite is happening: first Chile is aiming to secure new exports to receive the foreign currency it needs, and there appears no political will to challenge this.”

In your paper 'Only for the Global North?’ you say we should move away from considering degrowth as a nation state problem. We should also see the poor in the North and the elites in the South. Can you expand on that?

“I have real concerns about who benefits from this focus on lithium and green hydrogen. To explore this, there is a need to focus on the differences within countries. In Chile, this policy mostly benefits the small rich elites, who already have energy and resource consumptions similar to that in Europe – their businesses and their lifestyles. This does not support those living in energy poverty and needing access to cleaner energy, which is still a relevant part of Chile’s population. Similarly, the use of batteries or green hydrogen in electric cars does not help those marginalised in Europe.

The reality is that Chile’s export of lithium, copper and hydrogen will sustain extremely wasteful and material and energy intensive lifestyles of richer households in Europe, whilst Chile remains dependent on fossil fuels and creates new ecological sacrifice zones. All while not addressing its very real problems of energy poverty.

The same relations are mirrored elsewhere. For example, consider India where many of the nation’s policies support a small elite who have become incredibly wealthy, again reproducing the dynamics of extraction and dispossession inside boundaries. They say, ‘But we are a poor country, we need to grow’, yet investment is not addressing poverty.”

How might a country such as Chile break from this narrative of continued economic growth, and how might that impact on geopolitics?

“The financial constraints shaping national economic policies are reflected in current geopolitical relations. Unequal financial structures and incentives lead to developing countries depending on the currencies of developed countries, including repaying unfair forms of debt. Some countries say they have the right to access wealth via fossil fuels to drive development because other countries have already done this. For example, Argentina is advocating the expansion of dirty fossil fuel exploitation, to pay their debts. The alternative would be to reshape economies. This could start with reparations, as a way to erase debt, as called for by the debt for climate movement. This should be matched with rich countries forgoing power so there might be more equal international relations.

Geopolitics includes how the institutions of governments act in subtle ways to put pressure on countries. In Chile, our government has been reminded of the need to be linked to globalised trade, as it exists today. That was reflected in the new left-wing progressive government’s explicit efforts to say that they were not that radical, that they still wanted to have an economy open to foreign direct investment and maintain the default energy planning perspective for Chile as one that supports growth. Chile’s economic objective is for people to be better off – but doubling or tripling energy production and exporting this to Europe is unlikely to improve the living conditions of most Chilean people.

Change is suppressed by violence and enforcement happens at many levels. Militarisation happens within countries as well as between countries. It follows a known formula, where private property and extractive activities are protected by the police or the military, as is the case in some places in Latin America. One example is the ’state of exception’ deployed in the South of Chile, claimed ‘to help control the serious disturbance of public order’. This was the government using the military to suppress, and thereby effectively criminalise, the indigenous struggle against private extractive industries. This is not occasional but a part of how the structures of dispossession are sustained. And it sits alongside ownership strategies and institutional tools, such as the way environmental evaluation systems work, and how the spaces offered for participation exclude economic democracy. This translates into reinforcing the incapacity to change course, into degrowth, for example. Instead, the need for development and economic prosperity is presented as ‘catching up’ with the West.

A more pragmatic goal could be to consider different alternatives that include degrowth-inspired concepts such as the ideas of limits, sufficiency, that could be put at the service of planning for energy descent. In this context, it is relevant that there was a push to change the constitution, the first step to redesign Chile’s political institutions to restrain the neoliberal structures that dominate today. There was a referendum on a new constitution in 2022. The proposed constitution was underpinned by the concept of Buen Vivir, a political and philosophical proposal articulated by indigenous peoples. It is about stopping extractivism and could be seen as an approach that is to some extent aligned to degrowth. The new constitution had many promising proposals such as incorporating rights for nature. Before the final vote the stock markets fell as there was a huge fear that this constitutional change would affect economic stability. Public announcements aimed to address this, stating that Chile would not go down a path of radical change, and that continued resource exploitation would be encouraged, including through foreign direct investment.

The constitutional change was not accepted by voters, so the governance structures remain unchanged. This highlights the amount of political muscle or momentum that is needed to actually make the type of changes to bring about degrowth and the geopolitics that is needed to make it possible.”

This interview is also available in Dutch.