Chile

The Framework Law on Climate Change (Law 21.455), enacted in 2022, sets carbon neutrality by 2050 and establishes 2030 as a legal milestone rather than a voluntary target. It sets governance and instruments, including the Long-Term Climate Strategy and sectoral mitigation and adaptation plans in 1 sectors, 16 regions, 101 water basins and 345 municipalities. In 2025, Chile submitted its updated Nationally Determined Contribution to the UNFCCC (NDC 3.0). The Long-Term Climate Strategy (ECLP, 2021) sets an economy-wide pathway to 2050 and includes sectoral emissions limits and implementation planning, and is integrated with sectoral plans. In addition, Article 6 of the Climate Change Framework Law mandates three national implementation strategies: a Climate Change Technology Development and Transfer Strategy, a Capacity Building Strategy, and a Climate Change Financial Strategy, which operate as legally defined means of implementation. The National Strategy for a Just Socio-Ecological Transition (ENTSEJ) 2025–2035, approved in 2025, includes green economy–related measures linked to the phase-out of coal-fired power plants and is territorially focused on affected zones, rather than constituting an economy-wide national plan.

Chile's framework is mostly voluntary, grounded in corporate governance codes, ESG guidance and transparency requirements. The Financial Market Commission (CMF) promotes good governance through the General Norm No. 461, which requires listed companies to disclose practices related to board diversity, sustainability, risk management and stakeholder engagement, including ESG-related information.

Chile has also advanced sustainable finance and ESG alignment (initiatives led by the Ministry of Finance, the CMF and the Santiago Stock Exchange). In particular, the Ministry of Finance, working closely with private sector stakeholders through the Mesa Público-Privada de Finanzas Verdes, developed Chile’s Taxonomy of Environmentally Sustainable Economic Activities (T-MAS) to help identify environmentally sustainable corporate activities and improve the credibility and comparability of green/ESG disclosures and investment alignment. "Comply or explain" mechanisms prevail.

In 2025, the "More Women on Boards" Law (Law No. 21.757) has been a landmark reform designed to address gender disparity in the top leadership of Chilean corporations. The law shifts corporate governance from a voluntary "good practice" toward a structured regulatory framework for publicly traded corporations and special corporations (such as banks and insurers). The ultimate goal of the law is a balanced board, where neither gender occupies more than 60% of the seats. In practical terms for most boards, this means at least 40% female representation by 2032, according to the law's calendar of implementation. Employee participation in corporate decision-making is not mandated, and ESG and SDG alignment largely rely on voluntary standards and disclosure-based incentives rather than binding requirements.

Chile has a solid legal and institutional framework for public participation, possibly one of the most advanced in the region. Law 20.500 on Citizen Participation in Public Management requires participatory mechanisms (public consultations, citizen councils, access to information) in policy design and evaluation. This legal framework is grounded in the recognition that individuals have the right to participate in public policies, plans, programmes, and actions, and that the State Administration exists to serve people, act within its legal mandate, promote the common good, and respond to public needs, incorporating citizens into public management at national, regional, and local levels. In practice, these participatory processes in public policy formulation generally take place at early stages of the policy cycle. A 2025 reform of the law sets participation as a legal right rather than a voluntary practice.

In institutional terms, Law No. 20.500 amended Law No. 18.575 (Organic Constitutional Law on the General Bases of State Administration) by incorporating Title IV on Citizen Participation in Public Management. Article 74 establishes that every public administration body must create Civil Society Councils (Consejos de la Sociedad Civil), consultative in nature, composed in a diverse, representative, and pluralistic manner by members of non-profit associations related to the mandate of the respective public institution. Chile also implements consultation obligations with Indigenous Peoples, derived from the Indigenous and Tribal Peoples Convention No. 169 (1989), which requires prior consultation when legislative or administrative measures may directly affect them. Generally, consultation mechanisms are mandatory in many policy areas, but not all of them, and the quality of participation varies across levels of government. In the case of lawmaking, however, citizen participation is not mandated in a systematic or uniform manner and largely depends on discretionary practices during the legislative process. Some Indigenous groups have criticised the “pro-forma” nature of consultations in the mining and energy sectors (notably lithium).

The Iniciativas Populares de Norma were an innovative citizen participation mechanism used in Chile during the 2021–2023 constitutional processes, which allowed people to submit draft constitutional provisions and, if they reached a minimum number of verified digital signatures, these proposals had to be formally debated by the constituent body. This mechanism was exceptional and confined to the constitutional process, without continuity as a permanent feature of the regular legislative cycle.

Chile is moderately advancing the use of beyond-GDP metrics. The National Statistics Institute (INE) and the Central Bank of Chile compile environmental and natural capital-related accounts, including accounts on water, energy, emissions and ecosystems. These data are increasingly used to inform sectoral policies, climate strategies and environmental planning. The government collects data on sustainability-related indicators, quality-of-life statistics, and social indicators linked to the SDGs, which are used in monitoring and reporting. These metrics inform strategic documents, but GDP remains the dominant reference in macroeconomic planning and fiscal decision-making. Chile does not yet have a single national wellbeing framework. Beyond-GDP measures are therefore used in practice, but are not yet mandated or systematically integrated into national planning and budget decision-making.

In 2023, President Boric established the Chilean Natural Capital Committee to advise the government on integrating natural capital into economic policy. This committee has piloted ecosystem service valuation in major river basins, such as Río Bueno, and is scaling these methodologies to other macro-areas. The Committee’s role is advisory and focuses on developing methodologies and evidence for integrating natural capital into decision tools, rather than operating as a comprehensive national wellbeing or wealth framework covering all capitals. Additionally, Chile’s NDC 3.0 uses social and environmental indicators to measure the success of its climate policies, shifting the focus from pure carbon metrics to broader human and natural wellbeing. Overall, Chile shows credible progress and growing technical capacity, but beyond-GDP frameworks are not yet embedded across the full policy cycle.

Chile was the first country in the continent to issue green bonds, back in 2019. The government's Financial Strategy on Climate Change aims to align financial flows with climate neutrality. This strategy was originally published in 2019 and updated in 2022, and is currently undergoing an update process to broaden its scope toward wider environmental objectives (MAS Financial Strategy). In 2025, the country launched its Taxonomy of Environmentally Sustainable Economic Activities, which sets clear technical criteria for what constitutes a green investment and, in an innovative way compared to international experience, labels the mining sector as a "transition activity". The taxonomy (T-MAS) was developed through a public–private process led by the Ministry of Finance, strengthening the credibility and comparability of green finance classifications.

The Financial Market Commission has made ESG and climate-related disclosures mandatory for listed companies under General Rule No. 461. These disclosure reforms strengthen sustainability reporting and governance transparency and are part of a broader sustainable finance reform agenda. Furthermore, the Central Bank of Chile has incorporated climate risks into its financial stability analysis, participating in climate stress-testing pilots and scenario analysis aligned with the Network for Greening the Financial System recommendations. However, climate/environmental stress-testing requirements are not yet clearly mandatory and comprehensive across all financial institutions.

Despite the incentives and the regulatory supervision, there is not yet a "punitive" penalisation system for high-polluting industries (beyond the carbon tax, which the Boric administration has committed to increase to $35/tCO2 by 2030, in line with OECD recommendations).

The Central Bank of Chile’s Financial Stability Reports include stress-test results assessing banking system resilience under climate-related scenarios (physical risks like droughts, macro-financial risks or transition risks like carbon pricing), in alignment with international approaches such as the Network for Greening the Financial System. More broadly, Chile’s macro-fiscal framework is anchored in the Fiscal Responsibility Law (Law No. 20.128) and the structural balance rule, and the Ministry of Finance (through DIPRES) publishes the annual Public Finance Report (Informe de Finanzas Públicas, IFP), which provides an institutional basis to progressively integrate systemic risks (including climate related risks) into fiscal analysis. The Central Bank has been progressively incorporating climate related risks into its financial stability analysis and scenario work, although climate stress testing is not yet established as a comprehensive, mandatory requirement for all financial institutions. Under CMF General Norm No. 461, supervised entities are required to disclose governance, risks and practices related to sustainability (ESG), strengthening transparency; however, this is primarily a disclosure framework rather than a sector-wide mandatory climate stress-testing regime.

A national climate budget tagging system was first introduced as a pilot in 2022 in the Budget Law, and as of 2025 the Budget Office issues a specific "Climate Public Expenditure" report alongside the national budget; all government ministries are required o track green spending. DIPRES has further developed climate (and gender) budget tagging documentation linked to the annual budget process (including for the 2026 budget), and has stated a commitment to extend tagging across the budget cycle. These tools strengthen fiscal transparency on climate-related spending, but do not yet constitute a comprehensive sustainability review of budgets and spending decisions across the full fiscal cycle.

Chile's recent trade talks and agreements include sustainable development priorities and advance cooperation on climate and environmental issues (AFA, CPTPP, EFTA,...). More recently, the new EU-Chile Advanced Framework Agreement (AFA) includes a "Trade and Sustainable Development" chapter that makes the Paris Agreement a core element of the partnership. It is the first EU agreement to feature a dedicated Trade and Gender chapter and provisions for the sustainable supply of critical raw materials (lithium and copper) and green hydrogen. It also incorporates a dedicated chapter on reducing food waste, animal welfare, and reducing the use of chemical fertilizers. On green taxonomy interoperability, Chile has achieved interoperability with most of the world's taxonomies, lowering transaction costs as they can use a single set of data to report, for instance, to the Chilean regulator, the US authorities or the European Commission. However, Chile's carbon pricing regime remains relatively unambitious compared to other similar countries. Although there is currently a learning process underway to evaluate its best implementation through the World Bank's Partnership for Market Implementation (PMI), led by the Ministry of Energy in coordination with economic authorities.

Chile has a national carbon tax (introduced under Law 20.780), but limited in price level and coverage, and an economy-wide ETS is not yet fully in place (a pilot for the energy sector is currently in its design finalization phase, scheduled to begin full operation in 2026, and a broader carbon market roadmap is under development with support from the World Bank’s Partnership for Market Implementation (PMI)). Chile’s carbon tax applies mainly to large stationary sources and is set at USD 5/tCO₂, which is too low to be considered strong in driving deep decarbonisation, and includes sectoral exemptions. While policy documents have outlined a potential trajectory toward USD 35/tCO₂ by 2030 and the introduction of a compensation (offset) system, these measures remain at the design stage and have not yet translated into higher effective carbon prices or significantly expanded coverage. The OECD, in a 2025 report, suggested that Chile needs prices closer to international standards to meet its 2050 Carbon Neutrality goal.

Chile is one of the few nations with a legally binding national carbon budget. For the 2020–2030 period, the budget is capped at 1,100 MtCO₂e. In 2025, Chile submitted its updated NDC 3.0 which established a new absolute budget for 2031–2035 of 480 MtCO₂e. These budgets are translated into sectoral mitigation plans for ministries (now legally binding under the Framework Law on Climate Change), and Chile is currently updating its Long-Term Climate Strategy to ensure alignment with post-2030 carbon budgets.

According to the international monitor Climate Action Tracker, Chile's targets are "almost sufficient", indicating alignment with a 2°C rather than 1.5°C trajectory. Overall, while Chile has established a robust legal and planning framework for carbon budgeting and long-term mitigation, the effective carbon price signal and market-based instruments remain comparatively weak and under development, supporting the maintenance of the current score.

The Long-Term Climate Strategy (2021) and the Framework Law on Climate Change (2022) envisage coordinated, cross-sectoral climate policy across key sectors, primarily focused on mitigation and adaptation rather than a comprehensive green economy strategy. Throughout 2025, Chile began implementing mandatory Sectoral Mitigation and Adaptation Plans, which are specific roadmaps for ministries across key sectors, including Energy, Transport, Mining, Agriculture, Public Works, Housing and Urban Development, Health, Environment, Economy, and Defence. These are monitored for compliance by a government-led Council of Ministers for Sustainability and Climate Change, with the Ministry of the Environment responsible for overall coordination.

However, monitoring, evaluation criteria, and ambition levels vary across sectoral plans, as the Ministry of the Environment does not hold full technical or operational authority to ensure uniform assessment and adjustment across sectors. To ensure that cross-sectoral planning also addresses social equity, in 2025 the interministerial committees for "Just Socio-Ecological Transition" and "Just Water Transition" merged into one; however, this coordination mechanism does not constitute a permanent legal mandate and its continuity depends on the priorities of the administration in power.

On the other hand, the Scientific Advisory Committee on Climate Change serves as an independent body to review scientific robustness. In addition, the Framework Law incorporates Strategic Water Resource Plans for River Basins, which introduce a territorial and intersectoral approach to water governance, although their integration with broader sectoral planning remains limited.

Chile is working to integrate its "Roadmap for a Circular Chile by 2040" with legal instruments, [noting that the Roadmap itself is not legally binding and is implemented through sectoral laws and regulations], for example on Extended Producer Responsibility (EPR Law 20.920 now includes textiles as a "priority product" and requires all importers and brands to take legal and financial responsibility for waste management). This adds to targets for tires and packaging that became operational in 2023–2024. Complementary strategies have also been adopted, including the National Organic Waste Strategy 2040 (2021) or the Circular Economy Strategy for Textiles to 2040 (2025). Through the National Lithium Strategy (2023), Chile is focusing on "sustainable mining" that prioritizes material recovery and the reuse of mining by-products. The state also mandates the inclusion of circular economy principles and sustainability as evaluation criteria in public bidding. Consumer-level circularity measures are less central in Chile's strategy, which focuses on upstream governance.

The national electromobility strategy (2021, updated) and the energy efficiency law (2021) set clear targets, including 100% zero-emission sales of light/medium vehicles by 2035 and 100% of new additions to urban public transport being zero-emission by 2035. the ministry of transport’s sectoral mitigation plan from 2025 includes measures and incentives for bus electrification, taxi electrification, rail/metro expansion and active mobility, constituting an integrated national policy framework for green mobility.

Chile shows strong investment in electrified public transport, especially in santiago which has the largest electric bus fleet outside china and is on track to reach 68% total fleet electrification in 2026. This scale of implementation goes beyond pilot projects and reflects sustained, funded deployment. the country also shows rising ev uptake in private mobility.

Gaps remain, however, in regional intercity transport, rural access, freight decarbonisation, environmental standards for private vehicles or improving the public charging network outside major urban areas, which limits the overall ambition but does not undermine the existence of integrated and funded plans.

Chile has adopted medium and long-term renewable energy targets backed with investment plans and regulation. Chile's updated energy strategy "national energy policy" (2022) sets a roadmap with 66 targets covering various sectors. notably, it increases previous re targets for the power sector to 80% by 2030 and 100% by 2050. These goals are reinforced by chile’s climate governance architecture (framework law on climate change and long-term climate strategy), linking decarbonisation targets with sectoral measures and investment priorities. This framework is further strengthened by law no. 21.505 (2022), which enables energy storage, system flexibility and greater integration of variable renewable energy, reinforcing the clean energy investment pathway. Throughout 2024, renewables provided 70% of chile’s electricity (ember, 2025), but fossil fuels still account for roughly 60% of final energy consumption (data for 2023, iea). The national green Hydrogen Action Plan (2023–2030) and the national heat and cooling strategy aim to accelerate decarbonisation efforts regarding final energy consumption.

In addition, the long-term energy planning process (PELP) is currently under update, supporting continued alignment between energy targets and future investment decisions. On another hand, chile's coal phase-out plan is on track. since 2019, the country has shut down 11 coal plants and nine more scheduled by the end of 2026. the official deadline is 2040.

Chile's 2025 National Strategy for a Just Socio-ecological Transition frames the transition around equity, territorial impacts, social inclusion and decent work, including attention to communities facing industrial closures. However, this strategy is non-binding and operates primarily as a strategic and coordinating framework, rather than as a legally enforceable, economy-wide action plan. Before this, the Just Transition Strategy for the Energy Sector (2021) was the first sectoral application of the just transition concept in Chile, focused specifically on the coal phase-out. While these instruments demonstrate meaningful policy development and institutional coordination, Chile still lacks a fully operationalised, economy-wide action plan with comprehensive and enforceable social protection measures and labour guarantees for workers across all brown sectors.

While the national economic impact of Chile's coal phase-out is small, its local social impact is profound. Replacing coal with renewable energy is projected to create a net gain of 2.000 to 8.000 jobs by 2030 (Inter-American Development Bank, 2019), but this masks the loss of up to 4.000 jobs in the coal sector with above the average salaries. In these areas, coal power can account for 4% of local GDP and 7% of employment. Because renewable jobs may not be located in these same communities or offer equivalent benefits, a just transition will requires targeted local alternatives. This reinforces the importance of territorially targeted measures and labour transition mechanisms, beyond aggregate green job creation figures.

The Magallanes and Antofagasta regions have become the primary engines for green employment linked to the hydrogen boom, which will require over 30.000 specialized technicians and engineers. However, these emerging green employment opportunities are not systematically linked to transition pathways for workers displaced from brown sectors, nor do they yet constitute a comprehensive just transition framework.

The cornerstone of the just transition framework in Chile is the National Strategy for a Just Socio Ecological Transition 2025 to 2035 (2025), overseen by the Interministerial Committee for a Just Socio Ecological Transition. The strategy constitutes a significant policy advance and combines cross cutting national measures with territorially targeted actions, including a 2030 Action Plan with 101 specific measures, 91 percent of which began implementation between 2025 and 2026. These measures include Local Transition Plans for the 5 “sacrifice zones”, such as Mejillones and Coronel, as well as other coal affected territories, reflecting an explicit focus on communities historically impacted by coal based energy production. However, the strategy is not legally binding and operates primarily as a strategic and guiding framework, rather than as an enforceable economy wide implementation instrument.

While the Chilean government has established formal spaces for participation, some reports note that labor unions still face difficulties influencing national level social dialogue processes related to just transition planning. This highlights ongoing challenges in ensuring effective and inclusive stakeholder participation beyond formal consultation mechanisms. However, the Chilean model demonstrates that announcing coal retirement dates well in advance allows better integration of environmental goals with social and economic protections. A clear timeline serves as a vital negotiating tool, allowing stakeholders to align on transition speeds and to design compensation and support measures for affected regions. At the same time, the implementation and continuity of the framework remain dependent on the political priorities and commitment of the government in office, as a binding legal framework for just transition is still under discussion within the national legislative process.

Chile’s primary development agencies have launched dedicated “Green MSME” funds (CORFO's Green Hydrogen Facility, Sercotec's “Crece Sostenible”,...). Under the 2024–2025 Public Procurement Reform, MSMEs with “Seal of Sustainability” or BIC status receive preferential scoring in government tenders. This creates a market incentive for small businesses to “green” their operations to win state contracts. And the “Sence Verde” initiative provides free technical training for MSME workers in solar installation, EV maintenance and sustainable agriculture. In addition, voluntary schemes such as the Huella Chile programme provide further incentives for MSMEs to measure, manage and reduce their carbon footprint, reinforcing sustainability practices at firm level. The presence of Empresas B also contributes as a market based certification mechanism that promotes social and environmental standards among small and medium sized enterprises.

While Chile lacks a dedicated legal form for social enterprises, the BIC Law “Ley de Sociedades de Beneficio e Interés Colectivo” (2020) allows any company to adopt a legal BIC status if they pursue social and environmental goals alongside profit.

Chile is one of the first countries to treat social protection as a formal "pillar" of its NDC 3.0 (this social pillar is the National Strategy for a Just Socio-Ecological Transition). New regulations support local energy cooperatives. In regions affected by coal plant closures (like Coronel and Huasco), the government has piloted "Employment Incentive Payments" and extended social security coverage for workers. A pilot program with BancoEstado (2025) provides social housing with integrated renewable energy, reducing the energy poverty of the lowest-income citizens.

While the strategy and pilots exist, Chile has not yet a Universal Basic Income or a permanent Job Guarantee; instead, it uses targeted "Transition Subsidies". In practice, Chile has implemented just transition territorial planning linked to coal phase-out, and there are some community-oriented initiatives, but the country lacks a strong social protection package nationwide.

Chile has a high coverage of Marine Protected Areas (>43% of its jurisdictional waters, exceeding the global 30x30 target). In 2025, the government began implementing the National Ocean Program (Sustainable Ocean Plan) which mandates management plans for 100% of these protected areas. Chile has reported that around 22% of its terrestrial land is already designated as protected. While the percentages are high, there are reports that highlight that only a small fraction of these areas have effective management plans and the budget necessary to fund such management efforts, so the government focus now is management and enforcement. Overall, Chile shows implementation gaps typical of high-coverage protected area approaches (ensuring adequate long-term financing, management effectiveness, connectivity and terrestrial restoration outcomes...).

The new Biodiversity and Protected Areas Service created by Law 21.600 "Law for Nature" (2023) will begin operations in 2026. The SBAP consolidates all marine and terrestrial protected areas under a single technical body within the Ministry of the Environment. It represents a significant increase in the national budget for conservation, though critics argue that funding remains insufficient. This new service unifies the management of the National System of Protected Areas and introduces innovative financial instruments like biodiversity offsets and public-private conservation partnerships. SBAP strengthens the institutional architecture needed for implementation, monitoring and enforcement across the protected area system.

Chile’s government has launched in 2026 a biodiversity-linked sovereign bond framework to encourage long-term protection of nature and help insulate conservation targets from future political changes, successfully raising so far 1.5 billion € in the international markets. The instrument, designed with the Ministry of Finance, links financing conditions to measurable biodiversity and protected-area performance targets, meaning Chile could face higher borrowing costs if goals are not met.

Chile published its updated NBSAP (2025-2030) in 2025. It fully aligns with Global Biodiversity Framework goals, and for the first time, it incorporates a Business Action Plan on Biodiversity, requiring the private sector to integrate nature-risk disclosures and ""nature-positive"" operations. It also sets a target to restore 200.000 hectares of native forest and is financially anchored by Chile's Biodiversity Sustainability-Linked Bond.

In parallel, Chile is campaigning to host the Secretariat of the UN High Seas Treaty (the Biodiversity Beyond National Jurisdiction Agreement), which entered into force on 17 January 2026; it would be the first UN treaty secretariat headquartered in the Global South.

The government has a National Plan for Environmental Accounts aligned with the UN System of Environmental-Economic Accounting (SEEA). In 2023, Chile created the Natural Capital Committee under President Boric, a high-level governance body led by the Ministry of the Environment and including the Ministry of Finance, the Ministry of Economy, and the Central Bank of Chile, to provide advice and promote integration of natural capital into decision-making, and in 2025 the Ministry of Finance publicly announced the continuation of the Natural Capital Project (2026–2028) with international partners. The Committee was created by a Supreme Decree of the Ministry of Finance (Hacienda), is chaired by the Ministry of the Environment, and Hacienda acts as its technical secretariat. Following the pilot project in the Río Bueno River Basin (2023–2025), Chile is now expanding accounting works to three distinct macro-zones (North, Center, and South) to produce regional baselines and ecosystem accounts. However, while governance is in place and technical work is underway, Chile still does not have at the moment a complete set of natural capital accounts covering economic, socio-cultural and ecosystem/environmental values. Additionally, while the committee receives expert advice, the governance structure remains inter-ministerial rather than an independent external oversight body. This indicates strong progress and formal governance, but accounts remain under development rather than fully comprehensive nationwide.

The National Strategy for Food Security Sovereignty (2023) and the updated version of the Roadmap for Sustainable Food Systems (2025), target SDG 2 (Zero Hunger) and SDG 12 (Responsible Consumption and Production) and frame food security and sustainability as long-term state commitments, emphasizing local production and the "protein transition" while maintaining the country's role as a global agro-exporter. However, these instruments still have limited economy-wide quantified long-term targets on ecological footprint, healthy diets, food waste reduction, and harmful subsidy reform, compared to the requirements of a fully robust SDG-aligned food systems strategy.

Notably, the recent Incentive SIGESS System for Sustainable Soil Management Bill (2024) transforms the previous soil subsidy program into a sustainability-focused instrument that incentivizes regenerative practices. Additionally, Chile’s NDC 3.0 (2025) includes ambitious methane peaking targets for 2025 and a commitment to a National Strategy to Prevent and Reduce Food Loss and Waste by 2026. This food loss and waste strategy is therefore a forward-looking commitment rather than an adopted national strategy already being implemented.

In 2025, Chile updated its Sustainability-Linked Bond Framework to include biodiversity Key Performance Indicators, linking its sovereign debt costs to the expansion and effective management of protected areas. This mechanism imposes financial penalties if biodiversity targets are not met. In January 2026, Chile issued a sovereign sustainability-linked bond in euros linked to these biodiversity targets, operationalising the framework through a market transaction. It has also created the Biodiversity and Protected Areas Service (SBAP), which includes a National Biodiversity Fund designed to channel both public and private investment toward conservation and restoration. Additionally, Chile has a "polluter pays" system via its green tax on CO2 and local pollutants. In 2025, the government reaffirmed a trajectory to increase carbon taxes to $35/tCO2 by 2030. These instruments strengthen incentives for climate and biodiversity outcomes, but most “polluter pays” measures referenced here remain primarily climate/air-pollution focused rather than biodiversity-specific fiscal reform. However, reforms to eliminate harmful subsidies (such as diesel and certain agricultural incentives) are still under discussion or in early pilot phases, and full implementation of the SBAP's "Law for Nature" (Law 21.600, 2023) is underway. In 2025, Chile hosted the 6th Global Conference on Biodiversity Finance (BIOFIN), solidifying its role in developing innovative financing mechanisms tied to natural capital. Overall, Chile shows clear progress on nature-linked sovereign finance and institutional reform, but large-scale, sustained and targeted finance flows empowering IPLCs are not yet clearly evidenced at national scale.

Chile has used the COVID-19 recovery period to advance targeted green-economy measures that contribute to decarbonisation, resilience and green jobs. This includes strategic public-policy deployment of green hydrogen as an economic transformation pillar, broader efforts to embed green growth and climate goals in economic planning, and the increasing use of sustainable finance instruments and investment to support clean infrastructure and energy transition. The core of this approach is the government's Fiscal Pact for Development (2023) and the Green Hydrogen Action Plan (2024). These instruments are primarily medium- to long-term policy frameworks rather than short-term green stimulus packages deployed specifically for macroeconomic stabilisation.

Also, Chile is the first country to institutionalize "green conditionality" at the sovereign level through its Sustainability-Linked Bond Framework, updated in 2025. This framework ties national debt costs to specific biodiversity and GHG targets. While this strengthens sovereign-level sustainability incentives, it operates through financing conditions rather than attaching green conditionality across broad recovery support packages.

The ongoing retirement of the country’s coal-fired power plants has been accompanied by economic support packages for the regions affected (specific training and local investment funds). The 2025 Budget included climate budget tagging, allowing for tracking of how stimulus funds contribute to the NDC targets. In addition, Chile’s Agenda 2030 Implementation Strategy proposes integrating SDGs into central government budget-cycle monitoring (including DIPRES systems), identifying SDG related public spending and investment, and producing annual reports on SDG indicators and resources allocated to SDG linked programmes, strengthening transparency and accountability for sustainability aligned public spending. Overall, Chile has several targeted green recovery relevant measures and strengthening monitoring tools, but evidence of an ambitious, economy wide green stimulus suite (at significant % of GDP) remains limited.