Executive Summary
With mounting scientific and political consensus about the existence of a global climate emergency and increasing evidence about the opportunities and socioeconomic benefits associated with a low-carbon and resilient just-transition, several national governments are making substantive decarbonization commitments. In the case of Mexico, not only is there little climate ambition, but also a prevailing narrative around fossil energy self-sufficiency and the high cost of low-carbon technologies and development pathways. If the country moved along a decarbonization pathway instead, it could mobilize investments and achieve its goals of improving people&rsquo;s wellbeing and boosting development. To achieve this, there are several technically and financially feasible policy levers with social, environmental and economic co-benefits. The most cost-effective and socially impactful opportunities lie within the energy, cities and land-use systems.&nbsp;
Introduction
There is increasing evidence about the potential co-benefits associated with greenhouse gas (GHG) mitigation, and several countries are committing to, or already implementing, ambitious climate strategies to pursue them. Looking at available data and literature, this commentary addresses the question of whether it would be possible for Mexico to achieve key social development aspirations while advancing a decarbonization agenda.
The Implications of Decarbonization for Development&nbsp;
Globally, there is a growing body of evidence about the benefits of promoting a more resilient and decarbonized economy. The 2018 Report of the Global Commission for Economy and Climate gives a conservative estimate of 26 trillion USD globally by 2030, compared to business-as-usual (NCE, 2018). Examples of the benefits are quickly multiplying at the international level. In Vietnam, for example, it has been proven that the country could benefit substantially from scaling up investments in renewable energy, particularly as this would help abate air pollution, with annual average cost savings of about 2.6 billion USD in 2025 thanks to improved health (Climate Analytics, 2019). In T&uuml;rkiye, after all costs and co-benefits are accounted for, the resilient and net-zero development pathway has a positive net economic impact that increases over time (World Bank, 2022). In Latin America, it has been shown that decarbonization pathways are feasible in several countries that could reach net-zero GHG emissions while benefiting from economic growth, improved air quality, and lower cost and higher quality transport, among other benefits (Bataille et al, 2020).
There is an international momentum with countries promoting an economic model that aims at materializing the co-benefits of enhanced climate action. As of September 2022, a total of 89 countries, representing 73.5% of global GHG emissions, had already committed to a net zero target, be it in a law, a policy document or in a political pledge (Climate Watch, 2022). Among them, there are several in Latin America, including Argentina, Brazil, Colombia, Costa Rica, the Dominican Republic, Panama and Uruguay.
In light of the current global context, a strong post-COVID job-creating recovery is essential, thus making the choice of policies and investments to boost economic recovery particularly critical. To this end, green investments generally create between 1.4 to 3.5 times more jobs per million USD than unsustainable investments globally (Jaeger et al., 2021). By 2030, more than 65 million green jobs could be created, while saving close to 700 thousand lives worldwide (NCE, 2018). It is projected that the transition to a net zero emissions economy by 2030 could represent the creation of 15 million net jobs in Latin America and the Caribbean alone. This includes sectors such as sustainable agriculture, forestry, renewable energy, and manufacturing and construction (OIT and BID, 2020).&nbsp;
The Mexican Context
Mexico was already suffering economic stagnation even before the emergence of COVID-19. &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;With 2019 records showing an annual decrease of 0.8% in GDP, things were to get much worse with the global economic recession that ensued with the health crisis. However, as for much of the rest of the world, the growth and development challenges faced by Mexico are not only due to the pandemic and associated social and economic fallout. These events only further aggravated several of the countries&rsquo; already existing vulnerabilities caused by low economic growth, mounting inequality, and the climate and environmental crises.
Climate change impacts have created additional socioeconomic stress. During 2021 and 2022, Mexico suffered one of the worst droughts in decades. Mexico ranks 9th on the list of countries with the greatest economic losses due to disasters in the last two decades (UNDRR &amp; CRED, 2018).
In terms of GHG emissions, Mexico ranks 14th in the world, with 1.35% of global emissions owing to the size and nature of its economy (WRI, 2022). Excluding land use changes and forestry, its total emissions have increased 62% between 1990 and 2019, and are projected to continue growing until at least 2030 (INECC, 2021b).
Opportunities Around Decarbonization in Mexico
Decisions over what climate and energy pathway the country follows will have a considerable and sustained impact on Mexico&rsquo;s economic and social development (GIZ, 2020). Mexico&acute;s updated Nationally Determined Contribution (NDC) recognizes that the country has &ldquo;a myriad of opportunities to undertake changes leading to the diversification of its energy matrix, and to lead transformational changes in its productive sector focusing on the population&rsquo;s welfare and in the protection and sustainable use of its cultural and natural wealth&rdquo; (SEMARNAT, 2020 p. 9). Indeed, evidence suggests that the national GHG mitigation targets are feasible and achievable with significant economic benefits (Grande-Acosta et al, 2017).
In order to achieve a deep decarbonization pathway for Mexico, interventions should focus on substituting fossil-fuel electricity for renewables as the main energy source before 2040. &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
Policies and infrastructure that favor public transport modes and vehicle electrification, and improving land use, agriculture and forest management practices should be implemented so as to reduce emissions and increase carbon absorption (Buira et al, 2021). Analysis carried out by the National Institute of Ecology and Climate Change highlights transport, land use and buildings as the sectors with the most cost-effective measures among those evaluated to achieve the mitigation target of Mexico&rsquo;s NDC (INECC, 2021a).
Analyzing a set of 35 GHG mitigation measures with which annual emissions would be reduced by 237 MtCO2e in 2030, the National Institute of Ecology and Climate Change estimates that the required aggregate investments would be in the order of 104 billion USD from the start of their implementation up to 2030, while associated benefits would amount to approximately 157 billion USD during the lifespan of these investments (INECC, 2021a). In this case, only tangible co-benefits are accounted for. The message from this analysis is that the implementation of mitigation action in Mexico is desirable from an economic and social perspective, and for the most part, feasible.&nbsp;
The World Resources Institute&acute;s analysis is consistent with these findings. It shows that Mexico could achieve progress on several fronts through interventions that are technically and economically feasible. Policies with large mitigation potential include &nbsp;transport demand management, placing energy efficiency standards for industry, transport and buildings, transport electrification, industrial cogeneration, improved land use management practices, promoting circular economy, or the adoption of policies that promote renewable energy. Substantial investments would be required to advance them, but they make economic sense in the mid- and long-term. Overall, more than 60% of the policies required for Mexico to achieve its NDC non-conditional target would have negative costs, since they imply investments that pay back, with several co-benefits. Furthermore, with the achievement of the conditional climate goal, about 26,000 deaths would be avoided between now and 2030, and more than 38,000 by 2050. Other social benefits have not yet been adequately quantified, but there are indications and evidence regarding potential gains in jobs, economic competitiveness, food and energy security, and social equity (Flores Montalvo et al, 2019).
&nbsp;
Conclusion
Given its condition as a highly vulnerable country, Mexico has prioritized adaptation to climate impacts over mitigation of greenhouse gas (GHG) emissions. However, it is a member of the G-20 and ranks among the top 15 largest GHG emitters globally, so it cannot avoid its share of responsibility in the fight to keep global warming below 2oC, as agreed in multilateral negotiations. Besides this, by not moving faster towards decarbonization and making heavy investments in oil-related assets, some sectors of the economy may lose their competitive advantage, with repercussions on both the economy and society as a whole.
There is growing evidence worldwide about the potential co-benefits of enhanced climate action, and several countries, including developing ones, are realizing them. In the case of Mexico, evidence demonstrates that through transitioning to a low carbon and climate-resilient economy, it can achieve progress in reaching its development goals. Now more than ever, pursuing low-carbon and climate-resilient growth is the best way to unlock crucial economic and social benefits. Moreover, it is critical to avoid the risks of recovery actions that may alleviate the economic emergency in the short term, but would lock the country in an unsustainable pathway.
For Mexico, key GHG mitigation policy levers fall within three specific systems: energy, cities and land-use. Economically and technically feasible policies such as increased penetration of renewables, building efficiency, sustainable transport, and improved agriculture and forest management practices, figure among the most cost-effective and socially impactful ones. Further analysis about the conditions that would enable the implementation of each strategy is necessary in measuring whether it is rational and sufficient to advance climate mitigation strategies that can lead to positive outcomes for the country overall.
References
Bataille, C., H. Waisman, Y. Brianda, J. Svenssona, A. Vogt-Schilbb, M. Jaramillob, R. Delgadoc, R. Arguello, L. Clarke, T. Wildf, F. Lallana, G. Bravo, G. Nadal, G. Le Treut, G. Godinez, J. Quiros-Tortos, E. Pereira, M. Howells and M. Imperio (2020). Net-zero deep decarbonization pathways in Latin America: Challenges and opportunities. Energy Strategy Reviews Vol. 30. Elsevier.
Buira, D., J. Tovilla., J. Farbes, R. Jones, B. Haley and D. Gastelum (2021). A whole-economy Deep Decarbonization Pathway for Mexico. Energy Strategy Reviews Vol. &nbsp; &nbsp; &nbsp;33, 100578.
Climate Analytics (2019). Decarbonising South and South East Asia. Country Report: Vietnam. Available at: https://climateanalytics.org/media/decarbonisingasia2019-profile-vietnam-climateanalytics.pdf
Climate Watch (2022). Net Zero Tracker. Available at: https://www.climatewatchdata.org/net-zero-tracker
Flores Montalvo, A., J. C. Altamirano, F. Olea and A. Zafra (2019). Choosing the Right Path: Low-Cost Policy Options for Enhancing Mexico&rsquo;s Climate Goals While Achieving Long-Term Social Benefits. World Resources Institute. Report.
GIZ (2020). Co-benefits: Contribution of the Energy Transition to Sustainable Development in Mexico. Available at: https://www.cobenefits.info/wp-content/uploads/2020/04/CoBeneficios-Espanol-200330.pdf&nbsp;
Grande-Acosta, G. and J. Islas-Samperio (2017). Towards a Low-Carbon Electric Power System in Mexico. Energy for Sustainable Development Vol. 37, pp. 99-109.
INECC (2021a). Estimaci&oacute;n de costos y beneficios asociados a la implementaci&oacute;n de acciones de mitigaci&oacute;n para el cumplimiento de los objetivos de reducci&oacute;n de emisiones comprometidos en el Acuerdo de Par&iacute;s. Instituto Nacional de Ecolog&iacute;a y Cambio Clim&aacute;tico, M&eacute;xico.
INECC (2021b). National Inventory of Greenhouse Gases and Compounds Emissions 1990 &ndash; 2019. Available at: https://www.gob.mx/inecc/articulos/presenta-inecc-el-inventario-nacional-de-emisiones-de-gases-y-compuestos-de-efecto-invernadero-1990-2019-284532?state=published&nbsp;
Jaeger, J., G. Walls, E. Clarke, J. C. Altamirano, A. Harsono, H. Mountford, S. Burrow, S. Smith and A. Tate (2021) The Green Jobs Advantage: How Climate-friendly Investments Are Better Job Creators. World Resources Institute. Working paper.
NCE (2018). Unlocking the Inclusive Growth Story of the 21st Century. The New Climate Economy. World Resources Institute.
OIT and BID (2020). Jobs in a future of zero net emissions in Latin America and the Caribbean. Available at: https://publications.iadb.org/publications/english/document/Jobs-in-a-Net-Zero-Emissions-Future-in-Latin-America-and-the-Caribbean.pdf
SEMARNAT (2020). Contribuci&oacute;n Determinada a Nivel Nacional de M&eacute;xico. Actualizaci&oacute;n 2020. Available at: https://unfccc.int/sites/default/files/NDC/2022-06/NDC-Esp-30Dic.pdf
UNDRR &amp; CRED (2018). Economic losses, poverty and disasters 1998-2017. Available at: https://eird.org/americas/docs/perdidas-economicas-pobreza-y-desatres.pdf
World Bank (2022). T&uuml;rkiye Country Climate and Development Report. Available at: https://openknowledge.worldbank.org/bitstream/handle/10986/37521/T%c3%bcrkiye%20CCDR%20Full%20Report.pdf?sequence=1&amp;isAllowed=y
WRI (2022). Climate Watch. World Resources Institute. Available at: https://www.climatewatchdata.org/countries/MEX?end_year=2019&amp;start_year=1990

Read Also