Uruguay Environment Profile 2012

Environmentally compatible growth has been taken into account in important portions of economic life. Environmental concerns are effectively addressed in many sectors that depend upon them, such as modern stockbreeding, wine production, tourism, water and sanitation, rural development and irrigation. Environmental awareness has made some progress lately in the public discourse and in some of the government’s programmatic and planning statements. But on the whole, ecological concerns tend to be subordinated to efforts to promote growth, attract foreign investment, and diversify and modernize production, which still are considered to be the principal economic goals. Rural out-migration, poverty and the extension of slum settlements around Montevideo have also limited the chances for environmental improvement. Long delays in modernizing a number of key state enterprises in the energy sector by means of public/private partnership also frustrated environmentalists; here some change took place in 2008 when state-owned electric power company UTE launched the first of a number of projected renewable energy joint ventures (partly with Spanish investors), among them a wind park. The national development agency (CND), with the support of the World Bank, has initiated a program to improve energy efficiency in both the public and private sectors. A key issue of transnational environmental conflict, from 2005 on, has been the construction of a pulp mill by Finnish investor Metsa-Botnia on the Uruguay river near Fray Bentos, on the border with Argentina, which has prompted violent protests and border blockades by Argentine and international environmental activists. Both sides have appealed more than once to the International Court of Justice, inflammatory rhetoric flared, and a full-fledged conflict between the two countries ultimately developed.

However, the dispute has been contained by recent, intensive communication and cooperation between the two governments on a number of other issues, changes in personnel, and Uruguay’s decision not to build a second cellulose plant (operated by ENCE, a Spanish company) at the same site as originally planned, but at Punto Pereira on the Rio de la Plata, which will not face the same type of Argentine resistance. In March 2009, President Vázquez proposed the creation of a fund to manage the effects of climate change, which would be supported by all groups of society. The future exploitation of the rich offshore natural gas reserves near Punta del Este from 2010 on will present another opportunity for testing the political weight of ecological awareness.