SANTIAGO – Chile will begin budgeting for the costs of fighting climate change, Finance Minister Felipe Larraín announced on Tuesday, as receding glaciers and drought put a squeeze on water and natural resources in the world's top copper producer.
The South American nation, which is due to host the COP25 global conference on climate change in December, said it would include a new line item for "climate expenditures" in its government budgets beginning in 2020.
"Currently, we don't know how much we're spending in the financing of climate action. The lack of information makes it difficult to make good decisions," Larraín told reporters.
The methodology, called the Climate Public Expenditures and Institutional Review (CPEIR), is sponsored in part by the United Nations Development Program (UNDP), and has received funding from Germany. It includes a tool that allows countries to more precisely track how much money is spent on fighting climate change.
Larrain said the tool would allow Chile to "assess...the costs of inaction, that is, incorporate the analysis of the cost of not implementing immediate and timely measures."
A years-long drought in Chile, coupled with a growing population and a sprawling copper and lithium mining industry thirsty for water, have forced Chilean officials to look more closely at the costs of climate change.
"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 can have a great impact," he said.
The CPEIR methodology is already applied in more than 30 countries, including Colombia and Ecuador.