The Green Transition: A Decisive Opportunity for Chile to Avoid Past Mistakes from the Copper Supercycle

The Green Transition: A Decisive Opportunity for Chile to Avoid Past Mistakes from the Copper Supercycle

Representing Chile at the 2024 OECD Global Forum on Productivity held in Paris, Rodrigo Krell, Executive Secretary of the National Productivity and Evaluation Commission (CNEP), underscored that “the green transition represents a crucial opportunity for Chile, provided we manage it wisely.

Krell highlighted Chile’s unique advantage—its vast lithium reserves—as a gateway to becoming a leader in producing this crucial resource essential to global electrification. However, he pointed out that success will depend on Chile’s ability to strategically manage the revenues generated by this resource. “The green transition is a decisive moment for Chile that demands a robust institutional framework to foster policies that will decisively advance human capital and innovation,” he remarked.

Reflecting on the lessons from the copper supercycle of the 2000s, Krell noted, “During that period, we failed to implement policies capable of turning extraordinary revenues into sustained growth.” He stressed that the recent slowdown in GDP per capita since 2014 underscores the impact of productivity stagnation from a decade earlier, a trend masked at the time by favorable trade terms. This situation hindered Chile’s development of a strong public policy framework to encourage investment in strategic sectors and human capital growth.

Krell acknowledged Chile’s recent strides in shaping lithium and green hydrogen strategies but emphasized that these must remain consistent over time. He urged for broad agreements to sustain these initiatives across political shifts, ensuring they continue regardless of changes in government priorities.

He concluded by noting that the green transition is not just a challenge but a historic opportunity for Chile to redefine its economic identity and position itself as a global leader in sustainable development. “The stagnation in GDP per capita since 2014 is a signal we cannot ignore. Chile is at a pivotal juncture, presenting an opportunity to change course. Success will depend on well-designed public policies reinforcing productivity, fostering innovation, and supporting inclusive, sustainable growth for future generations,” Krell concluded.