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Mexico’s Proposed 2012 Budget Fails to Allocate Adequate Funding for Climate Change

This post is based on a release that originally appeared on the CEMDA website.

According to a new study by the Mexican Finance Group – 16 NGOs, including CEMDA, that work on environmental, budget, gender equity, and human rights issues – the funding currently allocated in Mexico’s budget for climate change mitigation and adaptation is insufficient for meeting the goals the country has established for 2012. The group, created in 2010, agrees that international finance is necessary to complement domestic investment in order to achieve Mexico’s emissions targets, but they affirm that first and foremost it is necessary improve the national budget allocation to begin the transition towards a low carbon development path.

Mexico’s Mitigation Goals and the National Budget

In accordance with the goals established in the Special Program on Climate Change (PECC, per its acronym in Spanish), Mexico will reduce its GHG emissions by 51 million megatons CO2-equivalent from 2000 levels by 2012. Of that amount, 36% of the reduction is expected to come from the energy sector; 30% from agriculture, forests, and other land uses; and 23% from the transport sector. The Secretary of Environment and Natural Resources (SEMARNAT) has recognized that Mexico is behind in meeting these reduction targets. To reverse this, budgetary funds must be redirected in a transparent and equitable manner that allows Mexico to move towards a truly low-carbon economy.

To arrange such reallocations of funds, and at the request of several concerned members of Mexico’s Congress, CEMDA and our partners conducted an analysis of budget allocations in Mexico’s four major carbon-emitting sectors (transportation, energy, agriculture, and forestry). We found a disturbing decline in resources allocated to mitigation and adaptation in the 2012 budget proposal: These resources dropped from 584.2 million pesos in 2011 to 221.1 million pesos in the 2012 budget, a 62% reduction.

Energy

Mexico’s energy sector contributes 21% of the country’s GHG emissions. Investment in renewables and energy efficiency is fundamental to reducing those emissions. However, our analysis found that the government continues to prioritize fossil fuels and to promote the research and expansion of nuclear energy. It also found that energy sector subsidies – which primarily target fossil fuels – are rising; they will reach almost 84 billion pesos by 2012.

The Mexican Finance Group proposes that 2% of fossil fuel project funds be re-allocated to support renewable energy projects that were left out of the 2012 Budget. The group further proposes that resources for hydroelectric projects such as La Yesca, La Parota, and El Cajon — which have caused concern over severe environmental and social impacts — be directed instead towards strengthening policies and energy efficiency actions regarding energy production, distribution, and use.

Transportation

The transportation sector is responsible for 20.4% of Mexico’s GHG emissions, of which 98% come from the automobile subsector. Yet 70% of the resources allocated from the Federal Budget are invested in programs that expand, modernize, or build urban road infrastructure, which will increase emissions. According to Mexico Finance Group participant Gabriela Niño of EMBARQ’s Center for Sustainable Transport Mexico (CTS),

"It is important to allocate at least 10% of the budget for the construction of urban roads to the introduction and strengthening of integrated urban transport, especially at the state and municipality level.”

She added that it is especially important to promote energy efficiency and intermodal goods transport and to promote clean technologies and fuels.

Xavier Trevino, at the Policy Institute for Transportation and Development (ITDP) and a participant in the Mexico Finance Group, said that:

". . . the sector’s priorities to mitigate GHG should be reflected in the budget allocation, including aspects such as implementation of vehicle efficiency regulations and the increase of the scope and the financial support for the scrappage program1.”

He also stressed the importance of:

“. . . creating an investment fund of 250 million pesos, as well as the inclusion of 5% of the budget in the Metropolitan Fund to foster the use of bicycles as means of transportation.”

Forests

The Mexico Civil Council for Sustainable Forestry (CCMSS) estimates that Mexico loses about 200 thousand hectares of forests and jungles to deforestation annually, causing about 14% of the country’s GHG emissions. The proposed budget allocations for the forest sector for 2012 will make it difficult to verify the appropriate use of funds and to verify compliance with the goals of mitigation and adaptation. The Mexican Finance Group has proposed a transparency program for the budgetary allocation in order to ensure that a forestry policy that promotes sustainable forest management and the active conservation of forests is implemented.

Agriculture and Gender

According to Dolores Rojas, Campaigns Coordinator at Mexico Finance Group partner Oxfam Mexico, some resources in the agricultural sector must be redirected towards measures that contribute more effectively to the sustainable development of the rural and peasant communities. Among the recommended measures are the creation of a fund for the use of renewable energy and the sustainable use of water for irrigation; increased funding for renewable energy such as bioenergy (provided these endeavors have positive impacts on farmers and peasants and do not conflict with food sovereignty); the restoration of funds for the Program for Women in the agricultural sector; and the restoration of the Biogenetic Resources and Diversity Program.

Emilia Reyes, Coordinator of Gender in Public Policies and Budget at the organization Gender Equity: Citizenship, Work and Family, indicated that no program should reproduce or enlarge inequity.

“In the case of gender based inequity, programs should not be based on the reproduction of stereotyped traditional roles, nor should they increase women’s unpaid work load; on the contrary, they should foster special temporary measures for women to be able to reduce the inequity gap and democratize paid and unpaid work tasks. Even more so, the importance of sexual and reproductive rights as a framework for a comprehensive response to climate change should be acknowledged, since fast population growth is related to increased environmental degradation.”

This post is the work of an Open Climate Network partner. The World Resources Institute is not responsible for the content or opinions expressed by the author.


  1. The scrappage program is similar to the U.S. “cash for clunkers” program, where the federal government provides incentives to trade in old cars for newer, more efficient models. 

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