This is the research that I have found. Chile is in a subduction zone. That means that one plate is sliding underneath the other. The South American Plate is riding on top of the Nasca Plate. The younger of the two will ride on top because it is less dense. The older plate can plunge down and create a giant trench. The earth quake was caused because the pressure built up in between the plates. One plate will slip and that will shake the earth. This vibration will also cause a tsunami.
Subduction zones often create volcanoes. When the bottom plate melts it releases Carbon Dioxide that will boil up to the top and through the crust. This is a volcano. When the volcano erupts that is the carbon dioxide being released into the atmosphere again. One example of this is Mount Rainier In Washington State.
http://earthquake.usgs.gov/learn/glossary/?term=subduction%20zone
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