Chile should increase its pioneering carbon tax to accelerate the development of a carbon-free economy, the country’s outgoing Environment Minister Marcelo Mena said.

Known as the green tax, it charges companies 3,000 pesos ($5) per ton of carbon released as well as for emissions of contaminants such as particulate matter, nitrogen dioxides, and sulfur dioxides, especially if the source is a populated or already-polluted area.

Chile’s move toward renewable energy could be accelerated by significantly increasing the carbon...