This country note features selected environmental indicators from the OECD Core Set, building on harmonised datasets available on OECD Data Explorer. The indicators reflect major environmental issues, including climate, air quality, freshwater resources, waste and the circular economy, and biodiversity. Differences with national data sources can occur due to delays in data treatment and publication, or due to different national definitions and measurement methods. The OECD is working with countries and other international organisations to further improve the indicators and the underlying data. A large part of the text of this country note is drawn from the OECD Environmental Performance Reviews: Chile 2024.
Environment at a Glance: Chile
Chile is a medium-sized country and an open export-oriented economy with abundant mineral resources. Except during the COVID-19 pandemic, the country has experienced a long period of strong economic growth, which has helped reduce poverty and improve the well-being of its population, even though inequality remains high.
While population density is relatively low, more than 80% of Chile’s population concentrates in urban areas. Chile’s distinct geography, with desert land in the north, mountainous terrain throughout the country and ice in the south, results in high demographic and economic concentrations.
Natural resources such as minerals, forestry, and fisheries have been a key driver of growth. With around 45% of world copper reserves, Chile is the world’s main copper producer. Chile is also the largest world producer of natural nitrate, iodine and lithium (it has virtually all of the world’s mineral nitrate deposits, 62% of world reserves of mineral iodine and 12% of the lithium reserves) and a major exporter of molybdenum, among other minerals.
Chile has a wide range of climate and vegetation zones. Many of its ecoregions are considered significant to global biodiversity. Central Chile, including the matorral (shrubland) and Valdivian temperate forest ecoregions, is considered one of the top biodiversity hotspots in the world.
Chile’s GHG emissions have risen significantly (+28%) in 2010-2019 and decreased in 2020 due to the COVID-19 pandemic. This increase was mainly driven by CO2 emissions generated by fossil fuel burning. Land use, land use change and forestry (LULUCF) has consistently contributed to sequester carbon, with the exception of 2017, when Chile experienced devastating wildfires. Energy industries (generating electricity) and transport are the main source of GHG emissions.
Although they remain well below the OECD averages, per person production-based and demand-based (or footprint) greenhouse gas (GHG) emissions have been increasing since 1995, unlike most OECD countries. Demand-based emissions are higher than production-based ones, meaning that Chile is a net importer of GHG emissions embodied in its final demand.
The energy mix of Chile remains dominated by fossil fuels. The share of coal, peat and oil shale in total energy supply has fluctuated, sometimes by large amounts, and was 10.5% in 2023. The share of oil has remained relatively stable at about 42%. The share of natural gas has also witnessed large fluctuations and was 14% in 2023. A third of total energy supply is sourced from renewables.
By contrast, renewables represent 64.4% of electricity production and 33% of energy supply in 2023, amongst the highest shares in the OECD. Chile plans to phase-out more than 50% of coal-fired plants by 2025 and the remaining ones by 2040.
Air pollution remains a significant public health challenge, particularly in the northern and central regions. Despite progress in reducing emissions of particulate matter (PM10) and sulphur dioxide (SO2), other pollutants increased between 2016 and 2021, including fine particulates PM2.5, nitrogen oxide (NOx), non-methane volatile organic compounds (NMVOC) and carbon monoxide (CO). Most of the efforts to abate SO2 have targeted stationary sources, mainly power stations (i.e. thermoelectric plants). The increase in these other pollutants is due to a combination of factors, including continued reliance on fossil fuels for electricity generation, carbon-based transportation and growing industrial activity.
Despite the implementation of Environmental Regulation Programmes (PRAs) since 2016, average concentrations of PM2.5 remain among the highest in the OECD and considerably above the 2021 WHO guideline of 5µg/m3. The number of critical air pollution episodes has declined but remain common, especially in southern regions, where wood burning is exacerbated by poverty, thermally inefficient housing and weak electricity accessibility.
Chile’s freshwater resources are unevenly distributed across the country, resulting in stark contrasts for water availability and quality. The country’s distinct geography and climate variability across the territory add to the challenges for water management.
Water scarcity is acute in the arid north, where most of the water-intensive mining activities occur. It is a major challenge in central Chile, where agricultural production and population centres are concentrated. Pressures on water resources are growing due to various factors: rising demand; pollution; and declining, more erratic and unpredictable supply due to the over-allocation of water resources, drought and climate change. The impact of climate change on the hydrological cycle and rising temperatures generates considerable uncertainty about future water availability and demand (OECD, 2024[1]).
Demand for groundwater exceeds sustainable levels of supply in most regions. As of 2015, total volume of known allocated water rights for groundwater abstraction was greater than sustainable supply, resulting in over-allocation of these resources. Limited monitoring and reporting impede a comprehensive understanding of total freshwater abstractions for surface water and groundwater.
Chile has achieved close to universal access to safely managed drinking water and a relatively high share of access to safely managed sanitation services. More than two-thirds of wastewater receives at least secondary treatment. The share of primary treatment in urban areas hovered at just over 20% from 2010 to 2018. However, nutrient removal in wastewater treatment plants is necessary to avoid excessive nutrient discharge into receiving water bodies. This is common practice in many OECD countries but limited in Chile.
The quality of drinking water and limited coverage of sewerage and wastewater in rural systems are major issues. Many rural systems fail to meet quality standards. There have been no effective mechanisms, including reliable sources of financing and technical capacity, to ensure proper operation and maintenance. Technical capacity of community water organisations is limited.
While Chile generates less waste per person than OECD countries, its solid waste management system faces significant challenges. Despite high waste collection services coverage, two major interconnected challenges persist: financial sustainability (one-third of municipalities, do not have a substantial waste recovery budget, coupled with extensive sanitation fee exemptions and unclear tariffs) and behavioural change (waste separation and recycling). Waste recovery and recycling rates are expected to gradually increase, as a result of the implementation of mandatory Extended Producer Responsibility schemes. However, the country still landfills more than 90% of its municipal solid waste, one of the highest percentages among OECD countries.
Domestic material consumption (DMC) per person has increased since the early 2000, to a level much higher than the OECD average. This is due to the reliance of the Chilean economy on metals extraction and exports. However, DMC productivity has increased faster, and the per person material footprint remains much lower than the OECD area during the same period.
Chile has managed to increase its forest cover, mainly through large-scale tree plantations (EFI, 2019) but at the expense of native forests, creating trade-offs between afforestation with non-native tree species and biodiversity objectives. Land-use change, such as the conversion of forest lands to agricultural use, fishery, mining, urban and infrastructure development, continue to put intense pressure on terrestrial ecosystems. Wildfires, mostly caused by human action (e.g., carelessness, negligence, agricultural practices, or criminal intent) and climate change exacerbate these pressures (OECD, 2024[1]).
Chile is a biodiverse country with at least 30 000 species described, of which 25% are endemic. The central and southern zones of the country are considered a global biodiversity hotspot and among the most threatened due to land use changes, such as export-oriented agriculture and forestry, urban and infrastructure development, and wildfires. Approximately 4% of known native species in the country are classified as threatened.
Chile has made significant progress in expanding protected areas, having achieved its 2030 Convention on Biological Diversity (CBD) target on marine protected areas, by protecting 44% of its exclusive economic zone (EEZ), making it a leader among OECD and LAC countries. Although Chile’s percentage of land protected area (20.3%) is higher than the OECD average (16.7%) more efforts are needed to meet the 30x30 targets. Under its Nationally Determined Contribution (NDC) (Government of Chile, 2020), Chile has committed to expanding its protected areas by at least 1 million hectares by 2030, with a special focus on high risk and underrepresented terrestrial ecosystems (e.g., absolute desert, Andean wetlands and salt flats, sclerophyllous and deciduous forests and coastal ecoregions such as the Humboldtian). However, challenges remain in increasing management effectiveness both in private and public lands (CBD, 2021[2]) and reducing threats from human activities, such as forest fires and salmon farming within and near protected areas.
This section shows selected policy instruments based on data available for most OECD countries and does not provide a complete overview of countries’ policy mix to achieve their environment-related objectives. Interpretation should consider the country specific context.
Until 2020, environmentally-related tax revenue as percentage of GDP has fluctuated around 1.8%, above the OECD average but below the OECD Europe average. It has fallen to 0.8% in 2022. As in many countries, most receipts come from taxes on energy products and, to a lower extent, on motor vehicles’ purchase and use.
Since 1991, the Government of Chile has introduced two different price-stabilisation funds for petroleum products. Both shared the objective of partially insulating the Chilean economy from fluctuations in the world price of oil. When world prices were high (low), previously accumulated revenues would be used to lower (or raise) domestic prices, thereby applying a tax credit (or taxing) the consumption of petroleum products (OECD, 2023[3]).
The fiscal cost of support to fossil fuels in Chile was estimated at USD 2.57 billion in 2022. The support has more than tripled from 2016 to 2022, mainly driven by the change in budgetary transfers (USD 2.44 billion in 2022), of which the Stabilisation Mechanism of Fuel Prices (Mecanismo de Estabilización de Precios de los Combustibles, MEPCO) accounts for approximately 97%. The remaining support relates to tax expenditures (USD 0.12 billion in 2022), of which refunds to the fuel tax are the majority (OECD, 2024[1]).
In total, 56.2% of GHG emissions in Chile were subject to a positive Net Effective Carbon Rate (ECR) in 2023. Explicit carbon prices in Chile consist of carbon taxes, which cover 32.9% of GHG emissions in CO2 eq. Fuel excise taxes, an implicit form of carbon pricing, cover 23.3% of emissions in 2023. Direct fossil fuel subsidies cover 1.4% of emissions. About 23% of GHG emissions have a Net ECR above EUR 60 per tonne of CO2 eq., a mid-range estimate of current carbon costs. Net Effective Carbon Rates are highest in the road transport sector, which accounts for 23.3% of the country's total GHG emissions. The Net ECR is zero or negative in the buildings, other GHG emissions and off-road transport sectors. Together, these sectors account for 28.9% of GHG emissions (OECD, 2024[4]).
The share of environmentally-related government R&D budget has increased in recent years, to reach 5.7% in 2023.
With around 1 invention per person by national residents, Chile is a negligible player in environmentally-related innovation.
International development co-operation is a component of Chile’s national foreign policy. Chile graduated from the list of countries eligible to receive official development assistance (ODA) from the Development Assistance Committee (DAC) in 2017 but considers itself as a dual country (provider and recipient). It provides development co-operation as technical South-South co-operation through bilateral, trilateral, multilateral and regional modalities. Chile’s international development co-operation focuses on Latin America and the Caribbean. It has also expanded its portfolio beyond this region to include countries in Africa and Asia. (OECD, 2025[5]).
References
[2] CBD (2021), Aichi Biodiversity Target 11 Country Dossier : Chile, Convention on Biological Diversity.
[5] OECD (2025), Development Co-operation Profiles, OECD Publishing, Paris, https://www.oecd.org/en/publications/development-co-operation-profiles_04b376d7-en/chile_f4312ff3-en.html.
[1] OECD (2024), OECD Environmental Performance Reviews: Chile 2024, OECD Publishing, Paris, https://doi.org/10.1787/5bc65d36-en.
[4] OECD (2024), Pricing Greenhouse Gas Emissions 2024: Gearing Up to Bring Emissions Down, OECD Series on Carbon Pricing and Energy Taxation, OECD Publishing, Paris, https://doi.org/10.1787/b44c74e6-en.
[3] OECD (2023), OECD Inventory of Support Measures for Fossil Fuels: Country Notes, OECD Publishing, Paris, https://doi.org/10.1787/5a3efe65-en.
CBD (2022), Country profiles: Chile, https://www.cbd.int/countries/profile?country=cl
EFI (2019), Planted Forest: The Big Opportunity for Forest Recovery in Chile and Uruguay, European Forest Institute.
Government of Chile (2020), Chile’s Nationally Determined Contribution, Government of Chile.
Kuzma, S., L. Saccoccia and M. Chertock (2023), 25 Countries, Housing One-quarter of the Population, Face Extremely High Water Stress, World Resources Institute, Washington, DC.
LIttle C., C. (2023), Otro Marco Forestal: del 701 a Territorios Multifuncionales, [Another Forestry Framework: from 701 to Multifunctional Territories], CIPER.
SINIA (2022), Reporte del Estado del Medio Ambiente 2022, [State of the Environment Report 2022].
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