Uruguay

Located in the southern part of the continent of South America, Uruguay has a land area [Page 1877]of 68,039 square miles (176,220 square kilometers) and an estimated population in 2006 of 3.4 million, most of them concentrated in Montevideo, the capital. Uruguay is a flat and fertile plain interrupted only by small elevations in the south and east that do not exceed 1,640 feet (500 meters). The coast is low and sandy, and the climate mild with occasional strong winds. The dense fluvial network, dominated by the Uruguay River, and adequate precipitation explain why around 70 percent of the country is constituted by natural pastures grazed by the livestock introduced by the Spaniards in the 17th century, Many of the environmental problems of Uruguay, a predominantly agrarian country and increasingly also a tourist destination, have been traditionally related to transboundary pollution from neighboring Brazil, especially the acid rain produced by the coal power plant of Candiota, which affects approximately one-fifth of the country. Soil erosion by wind has also been a traditional concern for ranchers (especially in the Department of Canelones), but recently it has begun to affect the expanding agricultural areas planted with soya beans on the highly erosion-prone soils of the eastern side. In 2003, only 0.4 percent of the total land area of Uruguay enjoyed some degree of environmental protection.

Water pollution by food processing industries (chiefly meat and meat products) is also significant. Critical areas in this respect are the Santa Lucia Basin (providing around 60 percent of the urban water supply of the country) and the urban basins near Montevideo. The capital suffers from air pollution originated by the oil refinery and the thermal power plants located in the vicinity. However, Uruguay obtains most of its energy from hydropower produced in the big dams of Rio Negro and Salto Grande (shared with Argentina) on the Uruguay River. In periods of drought, coal and oil power plants supply the energy needed.

During the 1990s, the expansion of forest land, advised by the World Bank and encouraged by the state with the objective of attracting foreign companies and developing the pulp and paper sector, was one of the key environmental issues in Uruguay. Rapid growth species such as eucalyptus have been introduced and benefits provided to foreign investors in the form of economic subsidies for plantations on specially designated areas. In turn, this has created wood and cellulose surpluses for export and possible carbon sinks for climate change policies.

However, the momentum gained by forestry faces opposition as well, especially from Argentina. In 2006 the proposal to build two paper and cellulose factories on the Uruguay River raised strong opposition by the neighboring country (a large proportion of the border between Argentina and Uruguay is formed by the Uruguay River). These factories represent the highest investment in Uruguay's history (about $1.8 billion) and are planned to produce more than 1.5 million tons per year of paper and cellulose. On the other side of the river, Argentine citizens argue that the pollution caused by these factories would ruin their agricultural and tourist activities. Argentina threatened to take this case to the international court of The Hague.

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