Preface

Natural resources are a pillar of Chile’s economy. Chile is the world’s largest copper producer, as well as a major exporter of agricultural, forestry and fishery products. It benefitted from the commodity price boom of the 2000s, and economic growth has been sustained for most of the last 15 years. It has greatly improved living standards, and massive investments have led to more people having access to key services such as wastewater treatment and urban public transport. However, strong growth has been accompanied by a stubborn persistence of income inequality and increasing environmental pressures, notably air pollution, water shortage, habitat loss, and soil and water contamination.

In response to these environmental challenges, since 2010, Chile has strived to strengthen its environmental institutions and design a comprehensive environmental policy framework. New policy instruments have been recently put in place, including a carbon tax. However, the positive effects on the environment have not yet fully materialised. In this respect, the next decade must witness rigorous reform implementation; this is the main message of the second OECD Environmental Performance Review of Chile.

The Review assesses Chile’s progress in achieving its environmental policy objectives, focusing on the period since 2005, when the first Environmental Performance Review was released. It provides 54 recommendations to help Chile green its economy and improve its environmental governance and management, with a strong emphasis on climate change and biodiversity policies.

Climate change is an increasingly important issue for Chile. Greenhouse gas (GHG) emissions have continued to increase in line with economic growth and are projected to continue rising. The country is vulnerable to the impacts of climate change, including flooding, extreme heat and declining water availability. In 2015, Chile committed to reducing GHG emission intensity by 30% by 2030 compared to the 2007 level, and by up to 45% if sufficient international support is provided. Achieving this commitment will be part of the global effort to meet the goals of the Paris Agreement. It will entail moving beyond the piecemeal approach that has characterised Chilean climate policy so far, towards implementing more ambitious and cost-effective mitigation policies that can be sustained and deepened over time. The Review recommends the clarification of institutional responsibilities for implementing climate change mitigation and adaptation policies, as well as the adoption of a financing strategy that facilitates private-sector investment in low-carbon and climate-resilient infrastructure.

Many regions of Chile are significant to global biodiversity, but pressures on ecosystems from economic activities and infrastructure development remain intense. Protected areas are a cornerstone of biodiversity policy; they cover more than 19% of the land area and the new Nazca-Desventuradas Marine Park is the largest in the Americas. However, effectively managing protected areas remains a challenge. The Review encourages the swift adoption of the proposed legislation creating a new Biodiversity and Protected Areas Service and an integrated national protected areas system. This would help improve biodiversity governance and management, partly through greater use of economic instruments such as payments for ecosystem services. Enhancing the participation of stakeholders and local and indigenous communities in decision making will be essential to address recurrent environmental conflicts, including water-use conflicts.

This Review has been prepared by the OECD in cooperation with the Economic Commission for Latin America and the Caribbean (ECLAC). It is the result of a constructive policy dialogue between Chile and the other countries participating in the OECD Working Party on Environmental Performance. We are confident that this collaborative effort will be useful to tackle our shared environmental challenges and steer economic development in a direction that is more environmentally sustainable and socially equitable.

Alicia Bárcena

Executive Secretary

Economic Commission for Latin America and the Caribbean (ECLAC)

Angel Gurría

Secretary-General

Organisation for Economic Co-operation and Development (OECD)