Showing a new way forward? Implications of Mexico’s pledge for global climate action

Last Friday, the United States and Mexico announced new plans to increase bilateral cooperation on climate change and low carbon development. This coincides with Mexico’s launch of its fairly ambitious plans  to reduce emissions and adapt to climate impacts.

President Barack Obama and President Enrique Peña Nieto announced plans to launch a clean energy and climate policy task force in areas including clean electricity, grid modernization as well as promoting more fuel efficient automobile fleets, weather forecasting and early alerts systems. The task force will be chaired by U.S. Secretary of Energy Ernest Moniz and Mexican Secretary of the Environment Juan Jose Guerra Abud, and will hold its first meeting this spring.

These are significant efforts, individually and as a signal about the value of international cooperation on this global problem. Mexico was the first developing country to put forward an INDC—its “Intended Nationally Determined Contribution” in the fraught lingo of the U.N. climate negotiations. The U.S. is expected to roll out its INDC today or tomorrow—to squeak in by meeting its promise to do so in the first quarter of 2015.

In our first article, we suggested Mexico’s INDC is  a very positive step because it includes a peak year for its emissions in 2026 and that it proposes to unconditionally reduce emissions by 22 percent by 2030 below the “business as usual baseline.” It calls for reducing black carbon—highly potent short-term pollutants—by 50 percent by 2030.

Our closer review of the document suggests there are two more interesting elements to consider: Mexico’s conditional pledge and its cooperative agreement with its northern neighbor.

Meet the conditions, get the prize

In its freshly minted INDC, Mexico put forward conditional numbers which are far more ambitious than the unconditional ones. It said that if the conditions are met:

“The 25 percent reduction commitment expressed above could increase up to a 40 percent [reduction in emissions]… [and greenhouse gas] reductions could increase up to 36 percent, and Black Carbon reductions to 70 percent in 2030.”

Despite Mexico being responsible for less than 2 percent of global greenhouse gas emissions, these kinds of steps would contribute positively to the ambitious requirements laid down by climate scientists about the total amount of greenhouse gases the atmosphere can handle before we tip into perilous levels of warming. So what are the conditions Mexico would need to see to take these steps?  Such actions, Mexico says, would be:

“subject to a global agreement addressing important topics including international carbon price, carbon border adjustments, technical cooperation, access to low-cost financial resources and technology transfer, all at a scale commensurate to the challenge of global climate change.”

Mexico doesn’t normally pull its punches in the climate negotiations. This is not a country saying they would do lots with piles of funding, and can do nothing without it. These are real conditions under which they could do more, and appear reasonable. But these are indeed major conditions, and highly variable in their likelihood of actually being met.

Let’s start at the end of this list. The transfer of technology for mitigating greenhouse gas emissions could mean Mexico receiving licenses to use or manufacture cutting-edge low-carbon energy sources, and mass storage of electricity. While most can agree that technology transfer is a good thing, companies developing these technologies are interested in protecting their patents and “innovation rents” from having invested in the research and development to make them viable. Our assessment is that this condition is only moderately likely to be met in the medium term. Africa managed to get generic AIDS drugs delivered at bargain prices without profits for drug companies, but this was only after a humanitarian crisis and a major struggle. Technical cooperation seems much more likely, and that is the nature of the U.S.-Mexico task force announced on Friday.

Access to low-cost financial resources is far more likely, since nations have pledged substantial funding to the Green Climate Fund and also pledged in Copenhagen and Cancun in 2009 and 2010 to jointly mobilize flows of climate finance to amounts approaching $100 billion a year by 2020. Nothing is ever simple in climate finance, and many promises have been broken, but low interest loans should be a fairly easy ask.

The phrase “carbon border adjustments” contains within it the very tip of a vast submarine iceberg of trade disputes with wealthy nations, which have threatened to impose tariffs on products coming from nations with higher carbon industries. The wording here is quite vague, but one assumes that Mexico would only act at these conditional higher levels if it received ironclad promises that such tariffs would not be imposed upon its steel or automobiles imported into the U.S. or Europe, for example.

Finally there’s an “international carbon price,” the idea that we need to have the free good of damaging the atmosphere taxed. Ninety percent of leading economists interviewed in a recent study agreed that pricing carbon is the best policy to address this collective good problem, and localities and a few nations are beginning to institute them. In 2014, Mexico introduced a carbon tax that levies $3.50 per ton of carbon dioxide equivalents (to account for different energy sources) that applies to fossils fuel but excludes natural gas. Instituting a global price on carbon remains the Holy Grail of climate policy, but unfortunately also is exceedingly unlikely in the near term. It is therefore perhaps the poison pill that Mexico has placed in its ambitious-sounding conditional pledges, but having this as a condition of higher ambition makes clear that this policy option needs multilateral consideration now.

Reaching across borders and building a pledge

That Mexico coordinated the launch of its INDC with an announcement with the U.S. on climate signaled a new kind of bilateral cooperation. Something new is emerging as nations seek to use bi- and mini-lateral forums as ways to create momentum that can support the bottom-up process of the “pledge and review” era ushered in at Copenhagen in 2009. The Mexican government is balancing the external validation that comes with working with its behemoth neighbor to the north, with the need for local participation in the process of developing its pledge. That process deserves clarification from civil society and government perspectives.

In February, Mexico held a public consultation on the design of its INDC and a web-based public survey was opened from March 9-20. According to the INDC, multiple groups were consulted during this process. Although this effort to include non-state actors is laudable, the timeframe for interested parties to contribute to the discussion was too short for such a significant document. In the case of Chile, public consultation on its own INDC lasted over three months.

Moreover, the launch of the INDC last Friday was a press-only event, which invoked some grumblings from civil society groups unable to attend. Mexico’s INDC will now be put out for public comment, which will be received through September. The ongoing involvement of Mexican civil society and other interested non-state actors will be important to ensure Mexico’s INDC process is inclusive and can raise ambition.

Some issues that need to be brought into the open are why Mexico’s pledge is only relative, compared to a fictional baseline of future “business as usual” projections of the economy and emissions, seemingly without improvements of efficiency or renewables. Other analysis states that it’s disappointing the INDC does not go nearly far enough in elaborating on how Mexico will reign in emissions from the energy sector—which is currently dominated by fossil fuels—and boost renewable energy.

There remains in Mexico’s INDC not a single indication of its real emissions versus the 1990 baseline, upon which all expectations and scientific assessments have been built. Presumably this is because Mexico’s emissions have soared since 1990—a 2006 EPA report showed its emissions up 42 percent from 1990. Still, Mexico’s per capita emissions are about 80th in the world, so relative targets and a peaking year at 2026 are probably substantial and ambitious pledges. We look forward to more independent analyses on this, especially from Mexican civil society.

Finally, the release of Mexico’s INDC and bilateral cooperation with the U.S. should be considered within the context of Mexico’s current political and economic conjuncture and its major energy reforms. Despite some progress on promoting renewable energy within these reforms the prospect of increasing oil and gas production and fracking are troubling if Mexico is to achieve what it sets out in its INDC. Furthermore, the ongoing corruption and security challenges that continue to rock the country could undermine the government’s ability to rule effectively.

Roberto Dondisch Glowinski, Mexico’s lead negotiator to the U.N. climate talks told ClimateWire, “we are trying to show that what we say in the negotiations, we stand by our words. Second, we want to show that it is feasible.” Mexico’s approach toward the U.N. climate talks and its domestic actions are very constructive steps. Its INDC will now undergo intense scrutiny in the months leading up to Paris by other countries and civil society groups alike. This open and progressive approach is just what the U.N. climate talks need if a new agreement in Paris is to come even close to what is required. The inclusion of conditional and unconditional contributions is useful, both in making it possible to know what Mexico can be counted upon to do, and to know what global changes will be needed for them to do more.