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Low-Carbon Development for Mexico
and greenhouse gas emissions). Many projects currently being promoted as “climate change” projects had previously been advocated for their energy security (renewables and energy efficiency) or local health and environment (reforestation and urban transportation) benefits. As elsewhere in the world, co-benefits in Mexico are typically not included in cost-benefit analysis or are undervalued in public decision making. Internalizing such benefits and costs—through pollution charges for air pollution or payments for environmental services, for example—is likely to lead to more efficient outcomes.
Near-Term Actions As the government of Mexico moves forward with its climate change mitigation program, it is important that it prioritize near-term interventions. This study recommends that priority be given to interventions with the following characteristics: • Significant emissions reduction potential • Positive economic rates of return, including large co-benefits • Successful demonstration at commercial scale in Mexico or internationally • Low investment costs and the ability to obtain financing. An additional consideration, in light of the international financial crisis of 2008–09, is that low-carbon interventions should have positive employment and secondary development effects. Initial evidence suggests that investments that contribute to improving the capital stock have the greatest impact on employment (additional research on this topic is warranted).5 The MEDEC interventions were limited to existing commercial technologies; all are therefore available today. All of the energy-efficiency interventions, plus those involving efficiency improvements in the power sector (cogeneration, utility efficiency) are technically ready, and all have substantial commercial demonstrations in Mexico. Some technologies—such as biomass power generation—have been demonstrated at scale abroad but not in Mexico; these interventions may need several years of market development to ramp up. The benefits of interventions involving changes in urban infrastructure—roads, buildings, housing, pedestrian facilities—will take time to reap, but all could be started immediately. Because the majority of interventions evaluated cost less than $10/t CO2e (and no interventions were considered that cost more than $25/t CO2e), most are economically viable today or would be so in the near future, assuming the development of a widespread international carbon market in which Mexico can participate.6 A final important criterion for implementation in the near term is that the legal, regulatory, and institutional barriers to implementation be surmountable. The litmus test for MEDEC interventions has been that they have already been successfully undertaken in Mexico or abroad. Most of the MEDEC interventions meet these criteria. Institutional barriers, such as