Chile: A Blueprint for Green Economy

Chile’s renewable revolution shows that sustainability leadership isn’t reserved for superpowers.

Despite its modest geopolitical footprint and remote location in the far south, Chile has emerged as an unexpected leader in the global transition toward sustainable development. The South American nation has become one of the world’s most compelling laboratories for green transformation, and its strategic approach to renewable energy, environmental regulation, and resource governance has made it a model worth watching. Its policies offer insights that extend well beyond its borders, helping demonstrate to similar nations that balancing development and sustainability is an achievable goal. Even so, Chile’s transition remains a work in progress, with several areas still requiring institutional strengthening and long-term policy commitments.  

Chile's Atacama Desert

Chile has experienced a rapid and successful transition to renewable energy. The country shifted away from its previously fossil-fuel-dependent model to generating over half of its electricity from renewable sources, primarily solar and wind. Granted, Chile is home to the sunniest place on earth: The Atacama Desert. The Atacama receives as much radiation as Venus, which gives the nation an upper hand in developing low-cost solar power. Geographically, Chile also possesses a long coastline and corridor-like mountains that create ideal wind conditions. Yet natural advantages alone cannot explain the scale of Chile's transformation. Green development on this scale would not be possible without a well-crafted, well-implemented policy framework. 

The Undersecretary of Energy under President Gabriel Boric, Luis Felipe Ramos, emphasises this point: “It is not only about extracting resources, but about developing an industry that implements regulation, standards, infrastructure, and crucially, internal demands.” (No se trata solo de extraer recursos, sino de desarrollar una industria que implica regulación, estándares, infraestructura y, crucialmente, demanda internal). Chile’s Ministry of Energy, in collaboration with other government branches, has been releasing extensive sustainability-related plans since the 1980s. By opening its renewable market early, designing competitive bidding processes, and creating long-term regulatory signals, the country attracted global investment years before other countries even entered the race. Many OECD countries could learn from this combination of ambition and predictability.

Chile has paired this early progress with a diligent push towards green hydrogen. Green hydrogen is a clean fuel, created by separating hydrogen from water, made possible through renewable sources, such as wind or solar. This is an alternative to the otherwise fossil-fuel-dominant production of energy. Chilean political figures have been adamant about their goals of becoming world leaders in this sector. Diego Pardow, former Energy Minister, remarked that “Green hydrogen should be a meeting point for public policies; green hydrogen is not only the future, it is the present and it is a place that invites us to dream.” (El hidrógeno verde debe ser un espacio de encuentro de políticas públicas, el hidrógeno verde no sólo es futuro, es presente y es un lugar que invita a soñar). 

In 2020, Chile pledged to become a net-zero emission country by 2050 and released an extensive Green Hydrogen Strategy. The strategy outlines the opportunity that green energy presents and lays out an action plan to address safety standards, promote exports to markets, and advance social inclusion. As of 2025, Chile has evidently been working towards these goals: more than 75 green hydrogen projects are under development, and over USD 5 million has already been invested towards a sustainable economy. These projects are not limited to Chile’s borders, but are playing a key role in the transition towards a more sustainable international economy.  Partnerships, such as the Netherlands’ plan to create a “green corridor” by importing Chilean green hydrogen, are complemented by agreements with Germany’s Hari Onu e-fuel project, Japan’s investment in hydrogen-based fuels, and the European Union’s hydrogen-cooperation framework. 

Chile’s ambitious economic goals are paired with strong commitments to environmental protection, which further strengthens its position as an example to follow. Santiago is the world’s second-largest operator of electric buses, surpassed only by China. As of November 2025, over half of the buses in Santiago were electric, with plans for the city’s public transport to become 100% emission-free by 2040. At the same time, Chile has expanded its large-scale marine-protected areas (LSMPAs) to protect its extensive coastline. As noted by Professor Alejandro Perez of the Pontificia Universidad Católica de Chile, “the ocean is hugely important in capturing carbon and liberating oxygen,” making marine conservation crucial in the context of climate change. 

Chile’s legal framework also imposes consequences for polluting, formalises recycling programmes, and enforces transparency and traceability. Examples of mechanisms that institutionalise waste management include Law 20,920. This law, based on Extended Producer Responsibility, aligns with Chile’s overarching goal of harmonising the efforts of the public and private sectors. Another example of an initiative supporting the Chilean circular economy is a law banning plastic bags, which fines businesses that provide them. Collectively, initiatives like these address environmental harm on multiple fronts simultaneously, creating a comprehensive strategy that reflects Chile’s strong commitment to environmental protection. Nevertheless, long-term industrial and behavioural change requires consistent monitoring and enforcement, areas where implementation gaps occasionally emerge.

Despite the country’s green ambitions and steps taken to support them, this transition is not perfect, nor free from criticism. Local communities, green leaders and environmental scholars have voiced fears about how green-hydrogen-related infrastructure projects create collateral damage. This includes the disruption of ecosystems, marine life and traditional lifestyles. There are also concerns about the negligence of domestic affairs, which comes with the focus on a private export-oriented sector. Marine biologist Carmen Espoz Larrain described this phenomenon as “green colonialism, using Chilean natural resources for a so-called green transition in the global north.” Making robust international deals is positive for a global transition towards renewable energy, but Chile must simultaneously focus on access and inclusion within national borders. On average, energy is roughly 73% more expensive for a Chilean than the global average, contributing to concerns about the cost of living, and again, excessive focus on economic growth while overlooking living standards.

Chile’s case deserves a central place in discussions about sustainability and pathways to a green economy. The country is not the richest, largest, or most geopolitically dominant green innovator— which is exactly why it matters. Its achievements are realistic and replicable. If other nations take inspiration from Chile’s coherent policy design, long-term planning and investment in renewable energy, even a medium-sized, resource-dependent economy can be turned into a sustainability frontrunner. The obstacles in the journey towards sustainability reflect that this transition is both imperfect and possible, making this case even more relevant for nations with similar constraints.