Chile's Carbon Tax: An Ambitious Step Towards Environmentally Friendly Policies and Significant Greenhouse Gas Emission Reductions

In 2014, Chile passed a large tax reform which notably included the introduction of three new environmental taxes: A carbon tax, a tax for local pollutants and a tax for new vehicles. Chile’s environmental framework has been widely strengthened through the introduction of the new green tax regime, procuring additional, cost-effective instruments for the environmental authorities to fulfil their obligations. On January 1st 2017, the green taxes regime came into force. Revenues from green taxes amounted to over USD 298.3 million in 2018, with the greatest contribution from the power generation sector (94%).