Mexico Publishes Unambitious Updated NDC

As a new year begins, it is urgent for Mexico to step back from its anti-climate energy policies and focus instead on a green recovery that brings clean energy jobs and builds more resilient communities.

Mexico capped off 2020 by submitting a “new” Nationally Determined Contribution (NDC) to the UNFCCC—an utterly deficient and disappointing document. NDCs are supposed to set progressively more ambitious mitigation targets as required under the Paris Agreement. Instead, in a year in which the Mexican government took several steps to boost fossil fuels at the expense of renewable energy, the updated NDC is one more signal that Mexico is effectively retreating from its previous leadership on climate and clean energy.

Although this submission outlines a number of new adaptation measures that also contribute to emission reductions, including some nature-based climate solutions, overall Mexico’s contribution does not go far enough nor reflect sufficient urgency in the face of the climate emergency. As announced earlier by the country’s Inter-Ministerial Climate Change Commission, the updated NDC merely “ratifies” the mitigation commitments established in 2015:

  • An unconditional reduction of 22 percent in greenhouse gas emissions and 51 percent in black carbon emission by 2030; and
  • A conditional reduction of 36 percent of greenhouse gas emissions and 70 percent of black carbon emissions by 2030

These targets had already been deemed “insufficient” and inconsistent with achieving a 1.5˚C warming limit – the threshold the world is mobilizing around. As it is, Mexico is not even on track to meet its current insufficient emission reduction commitments and actions taken by the current government put the country even further behind. At a time when Mexico—and other countries—need to strengthen their actions, the current Mexican administration is going backward.

Since taking office two years ago, the government of President Andrés Manuel López Obrador (AMLO) has prioritized ‘energy sovereignty’ and development. He views the state-owned oil and electricity companies, Petróleos Mexicanos (PEMEX) and the Federal Electricity Commission (CFE), as essential for achieving those goals. As a result, he has slashed the public budget dedicated to climate action and instead dedicated resources to modernize existing fossil fuel plants and build new oil infrastructure. Of particular concern is the Dos Bocas refinery that will process 340,000 barrels per day (bpd) and produce 170,000 bpd of gasoline and 120,000 bd of ultra-low sulphur diesel.

AMLO’s government has also repeatedly pushed forward energy policies that hamper private investment in renewable energy projects. Prior to these decisions, the Mexican renewable sector was just beginning to significantly ramp up to take advantage of the country’s huge wind, solar, and other renewable energy potential. Now, the uncertainty brought by the government’s energy policies is brining that recent renewable energy progress screeching to a halt.

In the past two years the government has attempted, and in some cases succeeded, in:

  • Canceling the fourth long-term clean energy auction creating uncertainty for private investment in the sector and future energy prices (these auctions had proven that Mexico’s renewable energy sources were cost competitive as previous rounds had set global records for the lowest price);
  • Canceling major high-voltage transmission projects, including a line to bring wind power from the southern state of Oaxaca (a region which has some of the world’s best wind resources);
  • Modifying regulations for clean energy certificates (CEL) to allow legacy hydroelectric, nuclear and hydrothermal plants owned by the public electricity company to obtain CELs (these financial instruments were intended to help expand the renewable energy sector, if existing plants are allowed to obtain them it would create a disincentive for new projects);
  • Suspending pre-operational tests for new solar and wind projects ready to start commercial operation while prioritizing the dispatch of conventional power plants (in addition to benefiting dirtier plants, such a measure would hurt the competitiveness of new renewable projects by making them wait longer than necessary to help meet Mexico’s energy needs); and
  • Vetoing the publication of measures that guaranteed open access to the national grids, established a regulatory framework for energy storage and allowed energy sales from distributed generation (creating even more barriers to the expansion of clean energy solutions).

In fact, favoring fossil fuels over renewable energy runs contrary to the country’s own best interests. A study last year quantified the benefits of key measures in Mexico’s NDC on livelihoods, food security, public health, water resources, employment and energy security. It found that generating 43 percent of electricity from clean sources by 2030 could increase employment in the electricity sector by 38 percent, reduce mortality, and create energy savings of at least US$1.2 billion in 2030. In addition, by continuing to emit climate-warming emissions, Mexico is putting its most vulnerable communities at higher risk. The impacts of climate change in Mexico were put in sharp relief during 2020: as experts called for increased hand washing and sanitation to combat the pandemic, unusually dry weather limited water supplies. In the Mexico City metropolitan area, low rainfall left a major reservoir at nearly 18 percent below its normal level, forcing some neighborhoods to depend on cisterns and water trucks.

As a new year begins, it is urgent for Mexico to step back from its anti-climate energy policies and focus instead on a green recovery that brings clean energy jobs and builds more resilient communities. The incoming Biden-Harris Administration can help by engaging with Mexico early on to collaboratively work toward a renewed North American leadership on climate and clean energy. And pressure will mount as the European Union moves forward with “sticks”—such as a border carbon adjustment—for countries that aren’t acting aggressively on climate change.

Mexico has proven in the past that it can be a leader on climate change. It now needs to quickly shift from going backward to moving aggressively forward.