Download Mexico - Climate Transparency

CLIMATE
ACTION
TRACKER
BROWN TO GREEN:
G20 TRANSITION TO A LOW CARBON ECONOMY
Mexico
This country profile assesses the Mexico’s past, present and indications
of future performance towards a low-carbon economy by evaluating
emissions, decarbonisation, climate policy performance and climate
finance. The profile summarises the respective findings from, amongst
others, the Climate Change Performance Index (CCPI, operated by
Germanwatch and Climate Action Network Europe), the Climate Action
Tracker (CAT, operated by Climate Analytics, NewClimate Institute,
Ecofys and Potsdam Institute for Climate Impact Research), and
analyses from the Overseas Development Institute (ODI).
Human Development Index
Share of global
GHG emissions
GHG emissions
per capita
Share of
global GDP
GDP
per capita
(tCO2e/cap)
G20
average
0.76
0.82
0
G20 average
8.7
5.7
1.3%
1
1
G20
average
Source: UNDP, data for 2015
Source: World Bank Indicators, data for 2012
$
1.8%
$
$
$ 13,484
$ 15,071
Source: IEA, data for 2013
GREENHOUSE GAS (GHG) EMISSIONS
1000
7
900
6
5
700
600
4
500
3
400
300
2
200
1
100
Emissions per capita (tCO2/capita)
Total emissions (MtCO2e/a)
800
0
30
20
26
20
22
20
18
20
14
20
10
20
06
20
02
20
98
19
94
19
19
90
0
Historic emissions
(excluding forestry)
Energy-related
CO2 emissions
Energy-related
CO2 emissions per capita
Current policy emissions projections
(excluding forestry)
Historic forestry
emissions/removals
G20 average of energy-related
CO2 emissions per capita
Mexico’s GHG emissions have continuously
increased in recent decades, up to 713 MtCO2e in
2012, and are likely to grow further by 2030.
Emissions from land use, land-use change and
forestry (LULUCF) declined since 1990 to 44 MtCO2e
in 2012. Mexico's energy-related C02 emissions have
grown similarly to total GHG emissions.
Energy-related CO2 per capita emissions have
increased to nearly 4 tCO2, but remain below the
G20 average. The CCPI indicates a relatively good
performance by Mexico, but the five-year trend
indicates a worsening development.
Composition of
GHG emissions
66%
N O 7%
CH 18%
F-Gases 1%
CO2*
2
4
CCPI evaluation of emissions level and trend
Level
Weak trend
very poor
poor
medium
good
very good
Strong trend
CO2 emissions
from forestry 7%
*CO2 emissions excl. LULUCF
Source: Annex I countries: UNFCCC (2015);
Non-Annex I countries: IEA (2014) and CAT (2015)
Sources: Past energy related emissions from the Climate Change Performance Index (CCPI); past non-energy and future emissions projections from the Climate Action Tracker (CAT).
CCPI calculations are primary based on the most recent IEA data; CAT calculations are based on national policies and country communications.
Brown to green: G20 transition to a low carbon economy
Mexico - Country Profile
DECARBONISATION
Total Primary Energy Supply per GDP PPP
(MJ per 2005 US dollar)
Energy intensity of the economy
10
The energy intensity of Mexico's economy (TPES/GDP)
has slowly decline over the years. Starting one third
below the G20 average, Mexico's energy intensity went
down to around 5 TJ per million US$ in 2000 and has
remained relatively stable at that level ever since. The
CCPI ranked Mexico’s level of energy intensity as good,
with a positive trend.
9
8
7
6
5
4
3
2
1
20
12
20
10
20
08
20
06
20
04
20
02
20
00
19
98
19
96
19
94
19
92
19
90
0
Energy intensity
CCPI evaluation of energy intensity of GDP
Level
Average energy intensity
in G20
Weak trend
Source: CCPI, 2016
very poor
poor
medium
good
Strong trend
very good
Carbon intensity of the energy sector
70
The carbon intensity of total primary energy (CO2/TPES)
in Mexico has increased throughout the years, but is still
below the G20 average. Compared to other countries,
the CCPI has evaluated Mexico as a relative poor
performer. The ongoing increase over the last five years
has led to a negative trend.
Tonnes of CO2 per TPSE (tCO2/TJ)
60
50
40
30
20
10
Carbon intensity
(past trend)
Global benchmark
for a 2°C pathway
30
20
26
20
22
20
18
20
14
20
10
20
06
20
02
20
98
19
94
19
19
90
0
CCPI evaluation of carbon intensity of energy sector
Level
Average carbon intensity
in G20
Weak trend
Sources: Past: CCPI; future projections: CAT
very poor
poor
medium
good
Strong trend
very good
40%
450000
35%
400000
30%
350000
300000
25%
250000
20%
200000
15%
150000
10%
Total coal in TPES [TJ]
Share of coal in Total Primary Energy Supply (TPES)
At 5%, the share of coal in Mexico's primary
energy supply is low, compared to other G20
countries. Future projections expect the coal
share to drop even further until 2030.
100000
5%
50000
0
% of coal (past trend)
% of coal (current policy
projections)
Average % of coal in G20
Global benchmark for a 2°C
pathway (min & max)
Source: CAT
Brown to green: G20 transition to a low carbon economy
30
Evaluation of coal share in TPES
20
26
20
22
20
18
20
14
20
10
20
06
20
20
02
98
19
94
19
19
90
0
Total coal consumption (TJ)
poor
medium
good
Source: own evaluation
Mexico - Country Profile
Renewable energy in TPES and electricity sector
900000
30%
800000
25%
Total renewable energy in TPES [TJ]
700000
600000
20%
500000
15%
400000
300000
10%
200000
5%
Mexico's share of renewables in electricity has
decreased over the years, down to a level of 15% in
2012. According to future projections, the share
will stagnate around 13-16% until 2030. However,
these projections do not yet include the effects of
a recently approved Energy Transition Law and its
target of 35% clean energy by 2024. As with the
share of renewables in electricity, Mexico's share of
renewable energy in primary energy supply is
decreasing, going from 12% in 1990 to a level of
8% in 2013, now below the G20 average. The CCPI
evaluates Mexico's renewable energy level as
relatively poor, with a negative trend.
100000
0
% of renewable energy
in electricity (past trend)
% of renewable energy
in TPES (past trend)
% of renewable energy
in electricity
(current policy projections)
G20 average % of
renewable energy in TPES
Total renewable energy
consumption (TJ)
20
30
20
26
20
22
20
18
20
14
20
10
20
06
20
02
19
98
19
94
19
90
0
CCPI evaluation of renewable share in TPES
Level
Sources: CCPI and CAT
Weak trend
very poor
poor
medium
good
Strong trend
very good
Emissions intensity of the electricity sector
The electricity demand in Mexico increased from a very low
level in 1990 to nearly 2000 kWh per capita in 2012. According
to future projections, it is expected that this growth will
continue in the coming years.
After slightly exceeding the G20 average up to 2003, Mexico's
electricity emissions intensity dropped to a low in 2008. Since
then, emissions intensity has been increasing again towards
the G20 average.
Electricity demand per capita
(past trend)
Average electricity demand
per capita in G20
Source: CAT, 2015
Electricity demand per capita
(current policy projections)
30
20
26
20
22
20
18
20
14
20
10
20
06
0
20
30
20
26
20
22
20
18
20
14
20
10
20
06
20
02
20
98
19
19
19
94
0
100
02
500
200
20
1000
300
98
1500
400
19
2000
500
94
2500
600
19
3000
700
90
3500
19
Emissions intensity of electricity [gCO2/kWh]
4000
90
Electricity demand per capita [kWh/cap]
Electricity demand per capita
Good practice benchmark:
without nuclear or large
hydro potential (Denmark)
Emissions intensity
(past trend)
Average emissions intensity in G20
Good practice benchmark:
with large hydro potential (Norway)
Source: CAT, 2015
Evaluation of the electricity
emission intensity
poor
medium
good
Source: own evaluation
Brown to green: G20 transition to a low carbon economy
Mexico - Country Profile
CLIMATE POLICY PERFORMANCE
Climate policy evaluation by experts
Checklist of the climate policy framework
Internationally, Mexico was evaluated as a good
performer until CCPI’s 2011 evaluation, when its
performance declined. Experts say energy policies
are not aligned with the emissions reduction
targets set by the Climate Change Law and the
INDC. While Mexico strongly supports the fossil fuel
sector, the CCPI still rates it well relative to other
countries.
Low emissions development plan for 2050*
2050 GHG emissions target
Building codes, standards and incentives for low-emissions options
Support scheme for renewables in the power sector
The CCPI evaluates a country‘s performance in national and
international climate policy through feedback from national energy
and climate experts.
Emissions performance standards for cars
Emissions Trading Scheme (ETS)
very good
Carbon tax
good
* understood as decarbonisation plans and not specifically as the plans called for in
the Paris Agreement
Source: Climate Policy Database, 2016
medium
poor
CCPI evaluation of climate policy
6
5
01
4
01
I2
CC
P
I2
CC
P
3
01
2
01
I2
CC
P
I2
CC
P
1
01
0
01
I2
I2
9
01
00
I2
CC
P
very good
CC
P
good
CC
P
medium
I2
I2
poor
CC
P
very poor
CC
P
00
8
very poor
CCPI edition
National
International
Source: CCPI, 2016
Compatibility of national climate targets (INDCs) with a 2°C scenario
1000
900
Max
Min
Total emissions (MtCO2e/a)
800
700
Max
600
Min
500
Max
400
300
Min
200
100
Historic emissions
(excluding forestry)
Historic forestry emissions/removals
sufficient
30
20
26
20
22
20
Emissions in INDC scenario (max & min)
CAT evaluation of Mexico’s Intended National
Determinded Contributions (INDC)
medium
18
Fair emissions reduction range
in a 2°C pathway
Current policy emissions
projections (excluding forestry)
inadequate
20
14
20
10
20
06
20
02
20
98
19
94
19
19
90
0
Mexico’s
Intended
Nationally
Determined
Contribution (INDC) was submitted on 28 March
2015 and proposes to unconditionally reduce its
greenhouse gases (GHGs) emissions and black
carbon by 25% below baseline levels in 2030,
equivalent to an increase of 35.8% above 1990
levels (including Land Use and Land Use Change
and Forestry – LULUCF emissions).
Based on this target, the Climate Action Tracker
rates Mexico as “medium” since Mexico’s ambition
level is not yet consistent with limiting global
warming to below 2°C, and would require other
countries to make deeper reductions and
comparably greater efforts.
Current policies imply emissions levels of 8–17%
above the INDC target in 2030. Mexico has shown
strong progress in policy planning and institution
building, including the adoption of its General Law
on Climate Change (LGCC in Spanish) in 2012. This
was the first law on climate change in a developing
country, under which Mexico aims to reduce its
emissions by 50% from 2000 levels by 2050. This
target is consistent with the INDC objective.
role model
Source: CAT, 2015
Brown to green: G20 transition to a low carbon economy
Mexico - Country Profile
FINANCING THE TRANSITION
Investment attractiveness
Allianz Energy and
Climate Monitor
RECAI* (E&Y index)
Category (own assessment)
Climate Transparency rates Mexico’s investment attractiveness as low to
medium, due to the historical state monopoly in the energy sector and
no substantive support schemes for renewables uptake. However, the
new “pro-market” government has begun an overhaul of the energy
sector. The 2014 constitutional reforms have opened up the electricity
sector to private developers who have been awarded contracts worth
1,720 MW of renewable power.
LOW
MEDIUM
Sources: Allianz Energy and Climate Monitor and RECAI reports
Trend**
*Adapted from RECAI and re-classified in 3 categories
(low, medium, high) for comparison purposes with Allianz Monitor.
**Taken from RECAI issue of May 2016
The Allianz Energy & Climate Monitor ranks G20 member states on their relative fitness
as potential investment destinations for building low-carbon electricity infrastructure.
The investment attractiveness of a country is assessed through four categories: Policy
adequacy, Policy reliability of sustained support, Market absorption capacity and the
National investment conditions. The Renewable Energy Country Attractiveness Index
(RECAI) produces score and rankings for countries’ attractiveness based on Macro
drivers, Energy market drivers and Technology-specific drivers which together
compress a set of 5 drivers, 16 parameters and over 50 datasets.
Historical investments in renewable energy and investment gap
This section shows Mexico’s current investments in the overall power sector (including distribution and transmission) as well as in
renewable energy expressed as the share of the total annual investments needed to be in line with a 2°C compatible trajectory
Investments
in the power sector
% of current investments
in the power sector
compared to
the investment needs
under a 2°C pathway
56%
Investments in renewable energy
for the power sector
28%
% of current investments
for renewable energy
in the power sector
compared to
the investment needs
under a 2°C pathway
Source: Adapted from WEIO, 2014(2)
WEIO (2014) compares annual average investments from 2000 to 2013 with average annual investments needed from 2015 to 2030 under a 2°C scenario
(2)
Carbon pricing mechanisms
Emissions Trading Schemes (ETS)
An ETS caps the total level of GHG emissions and
allows industries to trade allowances based on
their marginal abatement cost. By creating a
supply and demand for allowances, an ETS
establishes a market price for GHG emissions.
Carbon Tax
A Carbon tax directly sets a price on carbon by
defining a tax rate on GHG emissions or – more
commonly – on the carbon content of fossil
fuels. Unlike an ETS, a carbon tax is a price-based
instrument that pre-defines the carbon price,
but not the emissions reduction outcome of a
carbon tax.
In 2014, Mexico introduced a national carbon tax that, covered 46%
of the country’s emissions, and generated almost US$ 1 billion in
revenue by mid-2016. The existing carbon tax, in combination with
other climate initiatives such as a national emissions registry and
the Clean Energy Certificates (CEC) scheme, are expected to enable
a carbon market in 2018.
GHG
Sources: World Bank and Ecofys, 2016; other national sources
Brown to green: G20 transition to a low carbon economy
Mexico - Country Profile
Fossil fuel subsidies
Despite productivity decreases in ageing oil fields since 2005, Mexico is one of the world’s largest producers of oil and gas. In 2013, Mexico
initiated an energy reform to reduce oil industry restrictions to raise production and attract international players. Most of Mexico’s fossil
fuel subsidies are consumption subsidies, although some production subsidies intended to reduce operating costs for new companies
and spur a competitive market for oil and gas, currently exist (e.g. 100% deduction of exploration expenditures). In 2015, the government
began a new fiscal regime for the oil and gas industry to create a level playing field between the monopoly producer, Petroleos Mexicanos
(Pemex), and private players by reducing Pemex tax and royalty payments.
Average annual
national subsidies (2013-14)*
Mexico
G20 total
% of government’s income
from oil and gas production (2013)*
$1.4 billion
24.1%
$70 billion
Source: ODI, 2015
*The indicators above refer only to subsidies for fossil fuel production, and include direct spending (e.g. government budget expenditure on infrastructure that
specifically benefits fossil fuels), tax expenditure (e.g. tax deductions for investment in drilling and mining equipment) and other support mechanisms (e.g.
capacity mechanisms).
Public climate finance
As a developing country, Mexico is not obliged to provide climate finance. It has nevertheless pledged $10 million to the GCF. Mexico has
also created a national climate fund.
Brown to green: G20 transition to a low carbon economy
China - Country Profile