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The non-green effects of going green: Local environmental and economic consequences of lithium extraction in Chile

Author

Listed:
  • Peñaloza-Pacheco, Leonardo
  • Triantafyllou, Vaios
  • Martínez, Gonzalo

Abstract

In this paper, we investigate the local environmental and economic effects of lithium extraction in the Atacama Salt Flat (ASF) in Chile as a result of the global push for the adoption of Electric Vehicles (EVs). Utilizing granular administrative and remote sensing datasets, we assess the impacts of the extraction operations on water availability, vegetation, economic activity, and population dynamics in the ASF. Our findings reveal significant declines in groundwater levels as well as notable reductions in vegetation, economic activity, and local populations due to exposure to the extraction of lithium. We present evidence that the negative effect on vegetation was concentrated in human settlements as opposed to natural reserves, suggesting a reduction in agricultural activity. The main mechanism is the reduction in endemic forestry species and agricultural crops. This likely led to a decline in economic opportunities, which may explain the population outflow from areas around the ASF.

Suggested Citation

  • Peñaloza-Pacheco, Leonardo & Triantafyllou, Vaios & Martínez, Gonzalo, 2026. "The non-green effects of going green: Local environmental and economic consequences of lithium extraction in Chile," Journal of Environmental Economics and Management, Elsevier, vol. 136(C).
    • Handle: RePEc:eee:jeeman:v:136:y:2026:i:c:s009506962500141x
    DOI: 10.1016/j.jeem.2025.103257
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    JEL classification:

    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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