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Chile approved new financial model that helps environment

Chile will apply a financial model to measure the investments needed to combat the effects of climate change, such as the vast desertification of land, Finance Minister Felipe Larraín announced Tuesday.

View of a terrain of the Atacama desert in Chile

View of a terrain of the Atacama desert in Chile. / Reference image / Pixabay

Reuters | Fabián Andrés Cambero

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Leer en español: Chile aprueba modelo financiero que ayuda al medio ambiente

With the help of the United Nations Development Program (UNDP) and funds from the German government, the world's largest copper producer will include the component to weight "climate expenditure" in its budget since 2020.

"Currently, our country does not have a detail of the public finances relevant to the financing of climate action, so the lack of information makes it difficult to make adequate decisions," Larraín told reporters.

The adjustment will "assess the infrastructure investment needs based on the costs of inaction, that is, incorporate the analysis of the cost of not implementing immediate and timely measures," he added.

The official added that the initiative responds to the commitments made in climate matters by the nation, which will host this year the COP25 climate conference.

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"The lands threatened by desertification exceed 60% of the national territory ... having an estimate of the critical investments we must make to address the issue of desertification and soil erosion has great impact," he said.

Larraín said he will promote the initiative to an upcoming meeting in Washington of the coalition of ministers for climate action. The CPEIR methodology is already applied in more than 30 countries, including Colombia and Ecuador.

In June, Chile issued a 30-year green bond for 850 million dollars, becoming the first issuer of this type of paper in Latin America.

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