© Alfredo Dominguez

REDD is controversial: some consider it essential to halt deforestation in forest rich developing countries, others, a danger to biodiversity, indigenous communities and carbon markets. A view from Mexico shows that REDD is not a panacea to solve deforestation and yet, at least in the case of Mexico, it may be able to contribute to existing programmes that strengthen sustainable (community) forest management.

An approximated 70 – 80% of Mexican forests are ejidos, i.e. under communal management. The economic reforms under President Salinas strengthened property rights of ejidos, yet, given strict land use regulations, communities have very little possibility to gain incomes from forestry related activities, not to mention conservation. Thus, the opportunity cost to leave forests standing is too high for many of the impoverished forest communities and (illegal) land conversion for agricultural purposes is one of the main causes of deforestation according to one of the latest reports of the National Forest Commission (CONAFOR).

But the problem is much more complex: deforestation is not just driven by economic need, but also economic greed (illegal logging (supposedly responsible for 25% of deforestation) and tourism developments), public infrastructure development (from highways to oil drilling), forest fires, activities of drug cartels, local power conflicts and unsustainable ideas of economic modernization (these complexities are very well described in an article of the World Rainforest Movement on the devastating forest fires of 1998).

Ejidos although legally holding titles to the land, have lost power over how to manage their resources. Either they convert the forest to productive use (e.g. agriculture) or somebody else will come and do it, in the best case, paying them some sort of compensation, in the worst case, murdering those that try to cling to their land or protect the forest.

In this scenario, REDD earnings could support existing programmes to a) decrease the opportunity costs of conserving forests; b) do justice to communities who protect their forests and pay for their conservation of environmental services; and c) support government and communities in fighting against illegal land conversion and deforestation.

But it will probably not be able to do much more than that, as a little back-of-the-envelope calculation suggests. Mongabay, a site that “seeks to raise interest in and appreciation of wild lands and wildlife” calculates that Mexico could earn some USD70 million for a 10% reduction in deforestation (using an optimistic price of USD30 per ton of CO2 reduced). According to their calculations, this would equal a return of USD2,100 (!) per hectare of reduced deforestation.

BUT what does one hectare of reduction in deforestation imply ? (that is what Mongabay does not calculate).
Mexico’s National Forest Commission (CONAFOR) estimated in a presentation on Mexico’s advances in preparing for REDD (June 2008) that one hectare of reduction in deforestation requires 180 hectares under sustainable forest management and 150 hectares under conservation. Consequently, the various government programmes that are expected to cover almost 20 million hectares of forest between 2007 and 2012 will yield an estimated reduction in deforestation of 310,000 hectares. If REDD pays only for actual reduction in deforestation the per hectare value of REDD earnings -considering the entire forest area under sustainable management and conservation- will only yield: USD34 (not including transaction costs for project development, verification, monitoring, etc). That is maybe better than nothing, it might even be more than what some farmers earn from small scale farming activities, yet, it will not be enough to keep private interests at bay.

Thus, REDD alone will not solve deforestation. However, given that Mexico has created a strong legal and regulatory framework and is working on expanding its market incentives for sustainable forest management, REDD could provide financial support to strengthening these efforts.

Protests of the Movimiento Nacional en Defensa del Petroleo

“Yesterday here in Davos I heard three heads of state from Latin America seize leadership on “green” issues.” Nancy Birdsall’s (former vice-president of the Inter-American Development Bank) blog was full positive surprise. Apart from economic factors she attributes this leadership to “two decades of democracy, rising educational levels and civic activism” Funnily (or worringly), in Latin America, democracy and civic activism are double-edged swords: pushing the climate and environmental agenda on the one hand, stalling implementation on the other.

Climate change mitigation implies legal and economic reforms and often large infrastructure projects. Some Mexican examples are the energy reform, which although not ended state monopoly slightly loosened the State’s grip on the electricity and oil sector; the introduction of Bus Rapid Transit Projects (BRTs) in Mexico’s Metropolitan areas to replace inefficient Microbuses; or wind generation projects in Oaxaca.

All these projects are generally considered to be “social goods” mitigating climate change and its negative implications. In fact, some of these are even classified as “sustainable development projects” as they create not just an environmentally friendly outcome but also positive development externalities: the BRT for example not only decreases GHG gases but provides a faster and safer transport mode; renewable sources of energy are not only cleaner but contribute to rural electrification programmes.

Yet, in all these cases, there are people who consider these projects anything but a “social good”: in the case of the BRT, the former Microbus drivers protested heftily against the change (even though they were all employed by the BRT); Manuel Lopez Obrador who considers himself the legitimate president of Mexico after he lost what he (and many others) considered rigged presidential elections in 2006, organised the Movement in Defence of National Oil (Movimiento Nacional en Defensa del Petroleo) against the energy reform; local people staged a vehement protest against expropriation for the Oaxaca wind projects – the list is long…

Even if all of these projects were in the end implemented, their effectiveness is hampered because contents are watered down, or implementation and replication are significantly delayed. And the possibility that the next project may be discarded altogether is high, especially when protest turns violent.

But why do some groups oppose something that is a “social good”? First, because that “social good” provides a “social cost” to the populations directly affected: expropriation at an unfair compensation is one of the more obvious ones; the “cost” to switch from a relatively free daily work schedule to rigid working hours in the case of former Microbus drivers who now work for the BRT is less obvious but together with other reasons and the always underlying threat of an escalating conflict powerful enough to obstruct the expansion of this urgently needed public transport mode.

But, as Carlos Dominguez, Mexican PhD from Oxford and currently researcher at the Instituto Mora in Mexico City, argues a critical problem is the inability of public policy makers to incorporate these often incommensurable social, anthropological and political values beyond financial and technical norms into decision making processes.

At the bottom line, democratic change and the rise of civil action in Latin America have not only given a voice to environmental and other activists but have created a highly complex space of at best, constructive debate, at worst, destructive even violent conflict, where relatively small groups have the power to bring projects beneficial from a utilitarian point of view to a halt.

Not just in Mexico but in many other countries in Latin America, will policy makers need to adjust their policy evaluation and negotiation strategies to be able to turn climate action from rhetoric into actual projects on the ground.

The Annual Meeting of the World Economic Forum (WEF) ended yesterday. A selection of the sessions were webcast. One week every year, the tranquil swiss skiing village of Davos is transformed into an extravagant schmoozefest for the rich and powerful that are lucky enough to make it through WEF president Klaus Schwab’s door.

This year, bankers kept a low profile, not wanting to be seen in extravagant and luxurious settings. Some of those who came reportedly swapped their lear jets with first-class seats on commercial aircraft. According to one, the crisis had humbled them. Others said that for bankers, “sorry” is indeed the hardest word. The current and former U.S politicians that attended were those willing to take the blame. (Clinton, Gore, and Dean) The usual contingency of US senators was largely absent. Obama sent Valerie Jarrett, a senior advisor.

Not surprisingly, the financial and economic crisis figured heavily on the schedule this time, with each panel seemingly gloomier than the previous. Nouriel Roubini, whose previous warnings about an overheating economy used to be dismissed, was now the centre of attention. For most commentators, the main stories were the absence of bankers and the blame for the crisis that they received, as well as Turkish PM Erdogan’s overheating in an angry exchange with Israeli President Peres (and its possible implications) in a session on Gaza.

Against this backdrop, climate change featured as a bit of a side show, despite it being the most important year for global negotiations since 1997. However, the forum featured many sessions on the topic. (although few public transcripts) The official outcomes report (pdf) notes that, at the request of PM Gordon Brown, a new WEF task force of business leaders, economists and other experts was launched to provide advice to the UN climate negotiations. No details yet on who is on it.

The most newsworthy climate session (at least of the few that were webcast) was structured as a call to action featuring former VP Gore, UNSG Ban Ki-Moon, UNFCCC SG de Boer, Danish PM Fogh Rasmussen, Shell CEO van der Veer, and Swiss Re CEO Algrain.

- Ban-Ki Moon urged participants to stay focused on reaching a global agreement despite the economic uncertainty. In previous sessions, he noted climate change was the only “existential threat that we face”, and called on business and government to support a “Green New Deal.

- Gore urged participants not “to get the impression that Copenhagen is a weigh station on the way to something next year.” He reiterated comments he made during last week’s senate hearing and said “we need an agreement this year, not next year, but this year.” He noted that developing countries hold the key to a global agreement, as their engagement was more or less a precondition for some developed countries (i.e US) to consent to binding targets. And Gore came out in favour of a carbon tax, saying emissions trading was the next best solution to integrating carbon externalities in markets.

- de Boer said “we have got to get it right in Copenhagen, as there is absolutely no second chance here.” Offering few specifics, he said a global deal would need to include ambitious targets, significant engagement by developing countries (notably BRICS), stable, predictable financing for mitigation and adaptation, and new global governance. On the last point, he talked about the contradiction of asking developing countries to take more responsibility in global climate governance, while keeping their formal influence in global economic institutions (G8, IMF/World Bank) well below what the size of their economies warrants.

- Shell CEO van der Veer called for an a global agreement where developed countries take on obligatory cuts, and developing countries are included through sector agreements. He referred to CCS as an interesting technology with huge potential, but hampered by cost and lots of uncertainty. He said it could, at best, be a bridge to a future of renewable energy.

- Fogh Rasmussen said agreeing on a fixed framework with clear targets is a prerequisite for creating a market. He held out Denmark as an example of how renewable energy can be a driver for both climate mitigation and economic growth.

Some other notable messages;

In a session on emissions trading,

- Nic Frances of Cool nrg said energy efficiency will have to account for 50 percent of global emissions reductions under any long-term plan, and described plans to distribute millions of free energy-efficient light bulbs in the UK and Mexico.

- Lars Josefsson, head of energy giant Vattenfall, said global average per capita emissions would have to come down to 1 ton per day this century in order to avoid dangerous climate change. Today, that would amount to EITHER one hot meal, a t-shirt, or a 20km car ride. Take your pick.

- U.S Congressman Baird (D-WA) flew to Davos to call for 20 percent cuts in 20 weeks (!), all based on each of us making voluntary reductions in personal energy use. Why not?

In a session on climate justice,

- Kofi Annan offered few specifics but said a global agreement in Copenhagen would have to be fair and equitable.

- President Jagdeo of Guyana lamented the limited amount of adaptation funding available under Kyoto (USD 400 million) and said his country alone needed USD 450 million. He questioned the politicians willingness to spend hundred of billions to bail out financial institutions “too big to fail”, but their unwillingness to save the planet. He was in Davos to push for financing for poor countries to fund reforestation.

- Howard Dean said the EU was now the global leader in environmental standards and carbon markets after eight years of Bush, but predicted President Obama will get the U.S back on track.

Update 5/2: Here is IISD’s brief Davos climate wrap-up.

Photo courtesy of CFE

In October 2008, Mexican Congress passed the Law for the use of Renewable Energy (Ley para el Aprovechamiento de Energías Renovables y el Financiamiento de la Transición Energética) . While Maria Galindo discussed the political difficulties to turn this law into action, I will consider the question whether this Law is in fact, unconstitutional as some Congressman like to think.

Mexico’s constitution (Article 27) places sole responsibility of electricity generation into the hands of the Federal state. Moreover, the Federal Commission for Electricity (CFE)  -state-owned enterprise and responsible for two-thirds of Mexico’s energy generation and transmission, as well as the planning for energy provision-, is bound by this article to provide energy at the least-cost option. While the Ministry of Energy (SENER) could in theory specify how to interpret this clause, it has in the past adopted a very narrow definition based solely on financial variables.
This has favoured the development of conventional sources of non-renewable energy, especially gas and coal, whose use for electricity generation is expected to rise by 100% and 50% respectively by 2014, (Perspectiva del Sector Eléctrico 2005 – 2014) (Currently, gas represents about 19% of total generation and coal about 10%, while 49% of generation are produced by oil combustion.)

Private energy generation made an entry, with President Salina’s (1988-1994) highly controversial privatization and market liberalization policies. These policies provided a degree of space to self-suppliers, cogeneration and small-scale energy producers to generate and supply power into the grid. Since then, deeper and more thorough market reforms of the electricity sector such as tabled under past President Vicente Fox (2000-2006) failed due to strong resistance to open the market to private participation and threaten the least cost provision of electricity. Nevertheless, private power currently accounts for 30% of Mexican energy generation.
The increase in renewable energy generation has been hampered by a suite of systemic and institutional barriers:

1. private sector power generators face prices depressed by subsidies to the state companies (CFE and Luz y Fuerza), that do not reflect costs of electricity generation. This explains the proliferation of self-suppliers to commercial and industrial entities which overall pay higher electricity prices.
2. the construction of renewable energy plants involves high transaction costs, which make them largely unfeasible. These include applications for generation permits; the agreement of land or water leases from the legal owner; in many cases, the owner does not hold the deeds to his land, and thus has to go through the processes before a lease can be acquired; the political groundwork and obstacles that have already mentioned in Maria’s blog; and last but not least, charges levied by the CFE for the transmission and if necessary backup electricity which can reach up to 15 to 30% of the prices that power generation receive.

To scale up private sector participation and pave the way to meaningfully develop renewable energy supplies requires a legal basis that not only opens the market and creates greater investment security to the private sector but also re-interprets the least-cost clause to facilitate renewable energy generation by the public sector. The above mentioned Law is a step in the right direction:
Apart from setting a legal target for the share of renewable energy to be achieved, the law paves the way for an increased participation of private sector providers in Mexico’s renewable energy market: although it does not introduce an outright feed-in tariff structure, it creates a hybrid system of financial and political incentives. With respect to financial incentives it obliges the CFE not only to purchase energy supplies generated through cogeneration, self-supply or small scale production but also to pay a compensation that is not determined by the least cost prices but include the cost of the electricity generation.

The law aims to reduce transaction costs that the private sector faces, allowing SENER in conjunction with States and municipalities to simplify access to areas that are favourable to the development of renewable energy and simplify the process to obtain permits. Further, the law establishes the Green Fund to support projects that comply with the objectives of the Renewable Energy Strategy.

Does the law violate the least-cost clause of the constitution? The key to answer this question is the definition of least-cost. In the past SENER defined least-cost merely in financial terms considering costs of energy generation. Yet, the concept of least-cost can and is currently broadened by SENER to include the costs or benefits of energy diversification, and future stability of supply, environmental externalities, tax and other financial considerations for different energy types as for example carbon revenues. Thus, least cost not only has to take into consideration the actual cost of electricity generation but indirect costs and benefits associated with different types of electricity generation schemes.

Even if the Law has been approved, the actual modalities and specifications will need to be elaborated in the pertaining Programme and Strategy for Renewable Energy Provision (Programma y Estrategia Nacional para el Aprovechamiento de Energía Renovable y Transición Energética). Not just the contents but also the speed with which these will be developed will strongly determine the effectiveness and efficiency with which the law will be turned into action. In this respect, the fact that it took a whole three years until the Initiative for the Law -approved in December 2005-, was approved as law, serves as indicator for the degree of resistance that the development of the actual strategy and programme are likely to receive. This resistance is based on an incomplete and short-sighted assessment of costs and benefits of different electricity generation schemes that if not revised will severely impede Mexico’s ability to achieve electricity coverage targets while meeting social, economic and environmental goals in the future. Ultimately, sticking to conventional energy generation systems will violate the constitutional rights of least cost energy supply of future generations.

State Government Offices, San Miguel de Allende

It is clear that Mexico has begun taking legislative steps towards implementing climate change policy (and greener energy policy generally) in the country.  Perhaps the clearest example of this is the Ley Para el Aprovechamiento de Energías Renovables y el Financiamento de la Transición Energética (Law for Renewable Energy Usage and Energy Transition Financing), which hopes to promote and support the use of renewable energies in the country.  The law is ambitious in its remit, but issues of insufficient funding and inter-government interest negotiation may limit its effectiveness as it is implemented.

The law has three main objectives:

1. Promoting and implementing the use of renewable energy in the states;
2. Facilitating the “flow of resources” from international frameworks such as the CDM towards renewable-energy projects in the country;
3. Promoting the use of renewable energies generally, and providing education in this matter for policy-makers and other citizens.

The law aims to achieve this through the Estrategia Nacional Para la Transición Energética (National Strategy for Energy Transition), in which all major stake-holders, including energy providers, will be involved at the design stage, and through the creation of a Fondo Para la Transición Energética (Fund for Energy Transition).

Leaving aside the fact that the Fund is not extensive (3 billion pesos, or ~USD$210 million) and that this will limit the scope of the Strategy’s implementation, policy-makers and other government officials will face another significant challenge as the law is implemented: organisational problems at the national, state, and municipal levels, and the issue of negotiation between these.

The law hopes to bias energy production in the country in favour of low-carbon, or carbon-free, technologies.  To do this, renewable energy plants will be built and put into operation around the country, and the government will actively work towards “taking advantage” of international mechanisms such as the CDM.  The number of stakeholders involved in the law’s implementation will mean, however, that interests will not be shared across the board as Mexico “transitions” towards greener energy production.

At the national level, the law calls for the formation of a “technical committee” to direct the transition efforts.  Representatives from the Ministries of Energy, Agriculture and Rural Development, Fisheries, and Environment and Natural Resources, as well as from the Treasury and the Federal Commission of Electricity, the Central Electrical Company (Compañía de Luz y Fuerza del Centro), and the National Council of Science and Technology, will sit on this committee.

Needless to say, the interests of SEMARNAT (Ministry of Environment and Natural Resources) and CONACYT (National Council of Science and Technology) will differ greatly from those of the Federal Commission of Electricity (which provides electricity to the vast majority of Mexicans).

At the state level, the law hopes to promote the creation and use of renewable energy plants and the implementation of internationally financed and implemented CDM projects.

This may well result in an uneven distribution of clean energies across the country:

a. Some states, such as Oaxaca, in which the Isthmus of Tehuantepec (with its high-speed winds from both the Pacific and the Atlantic) facilitates the production of wind energy, will be better positioned geographically to produce clean energy.

b. Other states, whose economies are stronger or whose industrial development is greater, may well be better able to take advantage of international frameworks such as the CDM (and may be more interested in doing so).  Mexico has fewer CDM projects that one would expect from a country of its size and economic make-up; their current distribution is biased towards the north and centre of the country, where the larger industrial cities are situated.

c. Poorer states such as those on the Yucatán Peninsula may well lag behind in clean energy development and production as a result, creating progress in some parts of the country but neglect for green agendas elsewhere; production of carbon-heavy energies may remain stable, or even increase, in some ‘low-focus’ states as a consequence of this.

At the municipal level, the government will have to contend with municipal and citizen interests.  After the “municipalisation” of the country, spearheaded by the PAN, gave municipalities control over how municipal land can be used, municipalities and their citizen groups must agree before their land can be bought by the government in order to build federal projects such as renewable energy plants.  Municipalities’ power over predial (land use tax) collection means that economic interests, clientelism, and corruption issues play a role in deciding the fate of land in municipios.  This problem is compounded by the fact that municipal presidents tend to be figures of local influence, often with little or no political training.  Some municipalities may have progressive leaders who are able to promote the use of clean energies successfully, while other administrations may be at a loss as to how to do so.

Because municipalities will be able to sign agreements with energy providers directly (choosing what company to favour with their business), economic and personal interests may well dictate whether municipal governments choose to use carbon-free or carbon-heavy energies for their citizens.  This will be further complicated as the $3-billion “Energy Transition” fund is apportioned to different state and municipal governments.  As Nick Dommett has pointed out in another blog on Climatico, in developing countries, questions about the flow, use, and availability of money have a large role to play in determining the success of climate change policy.

Finally, lack of education about climate change mitigation and low-carbon or carbon-free energy may result in opposition to the development of renewable energy projects in municipalities.  NIMBY issues will also have a role to play, especially in parts of the country where income levels are higher, such as some areas of Mexico City and Monterrey.  The power of citizens at the municipal level must not be underestimated: during Vicente Fox‘s administration, citizen opposition to land sales stopped the development of a second, much needed airport in Texcoco (for which there was overwhelming popular support) to ease air-traffic flows to Mexico City’s Benito Juarez, which is located in the middle of one of the city’s residential areas.  Though the government can expropriate land–Fox’s government tried this to disastrous results in the case of the Texcoco airport–in order to facilitate the development of projects such as renewable energy plants, this option is obviously a political landmine: past experience suggests, however, that negotiation with citizens can be equally fraught with pitfalls.

If the Mexican Executive is to make the objectives of the Ley Para el Aprovechamiento de Energías Renovables a reality, then, it seems that the best strategy would be to get the negotiations–at all government levels–underway now.

Further work on this topic is currently being carried out by MSc students at Oxford University’s Environmental Change Institute.

Photo credit: Digiyesica, Flickr

To hear about water crisis in Ethiopia does not surprise, but not many people would expect that Mexico, an industrializing country, is facing serious water challenges. Punctually to the 20th anniversary of Conagua (Mexico’s National Water Commission), Mexico City has to close its water taps: from January until the end of the dry season (April), water supplies will be suspended for three days per month, to alleviate water shortages of Mexico City’s fresh water sources, which due to scarce precipitation, have reached the lowest levels for the past 16 years.

This is certainly not a once-off problem but the first signs of the culmination of two phenomena: immense overexploitation of available water resources not just in Mexico City but across the country and decreasing precipitation due to climatic changes.

With respect to the latter, the Ministry of Environment (SEMARNAT) and the Centre for Atmospheric Sciences of the Universidad Autónoma de México estimate that by 2020 precipitation rates in the Metropolitan Zone of Mexico City could fall by 5% while temperatures may rise by up to 1.2 degrees Celsius, increasing evaporation.

And Mexico City is surely not the only place facing these risks: in fact, the entire centre as well as the North of Mexico exhibits a similar problematic: severe overexploitation of water resources, and impending adverse impacts on water resources due to climate change.

What are the key problems: in Mexico City, it is of course rapid growth of the urban area, significant water losses due to an obsolete water distribution system but especially pollution of water bodies due to untreated release of sewage water. According to Government statistics (INEGI) Mexico’s urban areas generate 243 cubic meters of wastewater per second of which 25% drain off somewhere into the land-/cityscape, and only a third of which is treated. This does not account for leakage of pollutants due to waste and refuse such as Mexico City’s “Bordo Poniente”, the world’s second largest landfill site that receives 12.5 thousand tons of waste on a daily basis. In addition, deforestation and land use change threaten hydrological cycles and the replenishment of aquifers.

What are the solutions?

Mexico City is expecting the start of the construction of what will be the world’s largest water treatment plant, with a capacity of processing 23 cubic meters of water per second. Water treatment, the extension of sewage systems and access to potable water are also the priorities of Conagua. All these measures are of dire importance, yet as long as they are not coupled with activities that tackle not only symptoms but the actual root causes of the problem -pollution and overexploitation, due to bad planning at national and local level- Mexico will be ill-prepared to face water related impacts to climate change.

Mexico’s willingness to commit to voluntary emissions caps at COP-14 put it at the forefront of climate change mitigation efforts in Latin America, and made the country the example to follow for other developing nations. But Mexico’s efforts to implement climate change policy this year and in the future will be challenged and shaped by historical, political, and national baggage.

In order to put effective measures in place and meet the country’s 2050 targets, Mexican legislators and citizens will have to think creatively about how to incorporate—or circumvent—the issues currently attached to climate change reform on the Mexican agenda.

1. Location, Location, Location. Prior to Poznan, Mexico had been focused on situating itself in relation to other countries in terms of threat and responsibility. During the first week of COP-14, Reforma, one of the country’s major newspapers, published articles that highlighted Mexico’s position as the world’s twelfth largest emitter, and as the seventeenth country on Germanwatch’s list of nations most at risk from climate change. Post-2050 commitments, the challenge will involve setting self-comparing objectives, and moving away from the shadow of international rankings and towards the more serious business of national leadership.

2. Reactive Agency: Mexico implemented very few new climate change initiatives in the first half of 2008. Though Juan Rafael Elvira Quesada, Minister of the Environment and Natural Resources, had declared in November 2007 that the “inactions of other countries” would not be “a brake” for Mexican policy, he had also joined Indian and Brazilian leaders in putting economic and social development at the forefront of Mexico’s priorities. Up until Poznan, Mexico had relied heavily on positive rhetoric backed up by very limited action. This year will require a forward-thinking and innovative attitude on the part of Mexican climate change strategists, including legislators, if Mexico is to begin movement towards meeting its 2050 goals.

3. Preparation is Key: Though Mexico’s voluntary emissions caps announcement was hailed as a surprise, it is clear that Mexican policy-makers had been preparing for appropriating a new stance on climate change at the global level. President Calderón met with Al Gore in 2007, and in October of last year, Mexican Senators met with US government representatives from the EPA, in a day-long event focussing on climate change issues. A law issued by the Mexican Congress on October 28 called for the design of a Estrategia Nacional Para la Transición Energética (National Strategy for Energy Transition), which included a focus on climate change mitigation, seemingly in preparation for Mexico’s intervention at Poznan.

4. A Private Matter: All energy reform debate in Mexico must and does take place within a controversial context of conversation about the possible privatisation of nationalised oil resources. The structure and national ownership of PEMEX (Mexican Petroleum) established after a government expropriation of all oil resources from international companies in 1938, is considered sacrosanct by many. Powerful nationalist lobbies try to block all energy reform issues (and climate change mitigation measures will be no exception) in Congress by garnering public support through a rhetoric of threat and national economic loss. Whether the language of environmental concern will be able to supplant (and so overcome the obstacle of) this historically entrenched conversation remains to be seen.

5. Where the US leads… Mexico must follow. Over the next two years, one of the Mexican government’s primary priorities will be establishing a rapport with a new American administration. At the top of the agenda will be migration, drugs and drug trafficking, and trade agreements (Mexico sends the majority of its export goods to the United States). Climate change may well lag behind other issues, and if the United States chooses to forego climate commitments in favour of dealing with the economic crisis, it has the power to pressure Mexico to push the climate issue to the bottom of its national agenda, too.

6. …but where the US has lagged, Mexico is now leading. Mexico’s willingness to take on emissions commitments in the current economic context is a contrast to Obama and Biden’s more conservative energy plan. Obama’s early enthusiasm on climate issues has waned as other concerns have waxed, and this has opened the possibility for Mexico to be a regional leader on the issue in Obama’s first term. Obama has said he will release an ambitious energy plan once he is in office, however, and the two countries’ bilateral relationship will heavily influence Mexico’s climate change policy.

7. A Proactive Legislation Approach. President Calderón’s ‘personal commitment to climate change’ (as it has been described by senior legislators in the country) has pushed the executive to gather political capital to deal with the issue during the first two and a half years of his term. Resonating interests within the PRI and PRD (the main opposition parties) and the Partido Verde (the Green Party, which has bizarrely focussed, of late, on lobbying for the death penalty for rapists and kidnappers, seemingly forgetting its green legacy) has allowed for progressive legislative action on climate change. As Marie Karaisl has commented elsewhere on this site, Calderon’s new economic crisis plan has made an effort to include green considerations. Mexico must continue to pursue the legislative angle of climate change mitigation efforts aggressively in order to meet its 2050 targets.

8. Putting its money where its mouth is. The economic crisis will have a considerable impact on Mexico’s capability to tackle climate change, as it will on nations around the world. A new law on renewable energy sources allocates $3 billion pesos for the Fondo Para la Transición Energética y el Aprovechamimento Sustentable de la Energía (Fund for Energy Transition and Sustainable Energy Usage). Mexican legislators must carve out an economic space for climate change policy, if it is to be implemented alongside concerns more pressing to the public, such as the fight against crime and drugs, and welfare and benefits issues, during the economic crisis.

9. “Education is the best provision for old age”: As Mexico has emerged into its new role as a climate change leader in Latin and North America, its first priority—and perhaps its biggest challenge—in 2009 must be education. Mexico’s current climate change strategy includes an ‘education and awareness’ element, as evidenced by the recent Ley para el Aprovechamiento de Energías Renovables y el Financiamiento de la Transición Energética (Law for Renewable Energy Usage and Energy Transition Financing).  But if Mexico is to overcome both the historical legacy and the current obstacles that stand in the way of decisive action on climate change in the country, it will require the full support of an informed, and concerned, population.

A few days ago, Mexico’s president F. Calderon announced the Agreement to support households and employment (Acuerdo de Apoyo a la Economía Familiar y el Empleo) to abate the impacts of the economic crisis. Having discussed the possibility of integrating climate change concerns into economic recovery with 70 high level policy makers at the GLOBE meeting in November, Mexico’s anti-crisis plan indeed shows some green features.

1. The government will support families to exchange their old household appliances with new energetically more efficient ones.
2. Part of the employment created under the Temporary Employment Programme will be used for cleaning up forests and water bodies from garbage (garbage is the main methane emitter in Mexico).
3. Mexico will speed up its Infrastructure programme focusing on improving PEMEX oil distribution infrastructure.

The administration certainly shows good will; whether the net effect will be “climatically” positive or negative depends on the net effect of other crisis policies such as the reduction of industrial electricity tariffs and the accelerated extension of road and highways.

Mexico ended the year 2008 with great expectations regarding climate change action for the year to come: demonstrating leadership, it announced voluntary emissions reductions through a cap-and-trade scheme to be operational by 2012. But the efforts necessary for this undertaking could be seriously hampered by other national priorities: the fight against organized crime – and of course the economic crisis.
A look at planned government spending for 2009 demonstrates the prioritization: in November, congress approved a budget of US$ 170 billion. According to the Secretaría de Hacienda (Mexico’s Treasury) aggregating planned expenditures across the security sector (the Ministry of Security, special programmes, law and order, etc), will amount to USD 6.7 billion an approximate 30% increase compared to last year’s spending. The Ministry of Environment (SEMARNAT) will receive an approximate USD 3.3 billion.
The prioritization of security is further evident in official discourse, especially of President Calderon who has come under heavy pressure from civil society to improve the currently dismal security situation. News agencies differ on the exact number, but this year between 3,000 and 5,000 people have been murdered partly due to the response of the drug cartels to the fight against organized crime that President Felipe Calderon initiated in 2006. Moreover, Mexico by now leads the list of countries with the highest number of kidnappings before Iraq and Colombia. Yet, organised crime may impinge on environmental efforts more directly: undermining environmental regulations and legislation where it is cheaper for polluters to bribe themselves out of their obligations and responsibilities.
Apart from security issues, Calderon has approved an extensive infrastructure expansion plan, partly to counterbalance economic losses caused by Mexico’s direct dependence on the ailing US economy. The 2009 budget, allocates USD 5 billion to infrastructure development, 2/3 of that money into roads and highways. Taking a pessimistic view, these infrastructure projects may simply eclipse environmental and climate mitigation efforts such as reforestation, and induce additional demand for road transport. From an optimistic point of view, these investments in infrastructure development may create an opportunity to identify and incorporate sustainable solutions into infrastructure planning and design.
This year’s congress elections are a third factor that will influence climate change and environmental policy most likely negatively given the above two priorities. In any case, Mexico has certainly an interesting year ahead.

India’s strong position on climate change was reaffirmed this year at COP-14. It remains staunchly focused on a ‘common but differentiated’ principle, whereby those who are historic emitters of GHGs should be the mitigators under an international climate policy regime. As a result, India refuses to take on emissions caps or cuts. So what is India doing to combat climate change within this position? Is it feasible for it to do nothing?

Well, no, not really. Both politically and environmentally it is still required to slow its growth of emissions so that it doesn’t become the net historical emitter in years to come. Like many of the rapidly industrialising countries, India launched a National Climate Change Action Plan in 2008. Much of it focuses on low-carbon and clean growth, especially the use of renewables in energy.

By 2030 India wants to have 49% of energy from renewable sources, including 15% from hydro. In addition, to promote its focus on energy, India is hosting a Green Energy Summit in March 2009, where it hopes to showcase its leadership on clean energy growth.

The context for this focus on energy growth is India’s soaring demand for energy; it is expected that by 2030 India will require 400,000 MW of power, up from 130,000 MW today. Such demand is putting considerable pressure on existing energy sources and so is making the use of renewables more attractive.

India’s climate plan also allows India to continue growing and filling its energy needs, while at the same time reducing future emissions from future ‘dirty’ growth.

However, while having an energy-dominated climate package suits India politically and economically, it is unlikely to be so simple in practice. There are two main reasons for this.

Firstly, within India. These energy projects, which are extremely large, need to be funded. India wants a significant portion (we don’t know the exact number) of this to some of this to be through the CDM. However, if renewables are part of government programmes and targets then CDM projects are not necessarily additional–that is, they may not actually be reducing emissions more than if the project had not been financed by CDM. All CDM projects must be additional, a rule that is designed to prevent countries simply using the climate change framework to fund growth that they need and would have paid for themselves. Is India simply using climate change finance to fund an energy plan it was going to implement anyway?

Secondly, outside India. There is concern from parties, such as the USA, that focusing climate efforts on energy policy in the fails to deal with other key areas. At his press conference in Poznan, John Kerry outlined that the new US Government will want to see comprehensive plans from major developing countries. India’s focus on changing energy supply rather than tackling energy efficiency and use might not be what one would call ‘comprehensive’.

At the domestic and international scales India will need to show that its action on climate change is more than an energy plan dressed with climate change politic. At present it is China, Mexico, and Brazil that are seen as at the forefront of developing country action precisely because of the more comprehensive nature of their plans–including reducing existing emissions. India risks being separated from this group further if ‘climate’ doesn’t become more than ‘energy’.