Mexico

Mexicos National Development Plan does not take a coordinated green approach to development, and green economy plans contained within the countrys revised 2020 NDC have been suspended due to the document being rescinded as part of the Greenpeace Mexico court case. The court ruled in favor of civil society, arguing that the NDCs updated goals are the same as those contained in the 2015 submission, violating principles of progressivity set out in Mexicos General Law for Climate Change and enshrined in the Paris Agreement. The 2020 NDC repeated the same percentage reduction as the 2016 NDC: a 22% reduction in GHG emissions against the business-as-usual scenario and up to 36% conditional on international support. As a consequence, the lawsuit re-instated the 2015 NDC until the 2020 version is formally updated and revised. Reviewing the content of the 2020 NDC as it stands, reveals that it lacks detail with mitigation actions for specific sectors, but neglecting to back these up with concrete implementation plans - reading as a set of proposals requiring subsequent programs and legislation.

The National Development Plan indicates that the Federal Government will seek advice in strategic decisions of national interest, consulting the public on matters of regional or local interest. In 2006 the General Law for the Equality between Women and Men was published establishing the responsibilities of federal and local governments in ensuring equality across multiple dimensions like economic and political participation, social rights, civic life, etc. In 2019 a change in the constitution was adopted updating previous legislation to accommodate parity in political representation, ensuring that women have equal democratic participation and representation.

In the private sector, however, most good practices established to achieve gender equality and non-discrimination remain optional. National norms such as the Mexican Norm on Work Equality and Non-Discrimination and the Good Corporate Governance Code are in place to guide best practice and provide voluntary certification but there are no mandatory inclusion policies. Regarding workers participation, the Federal Labour Law establishes several instances of tripartite collaboration between the government, workers and their employers. However there are severe gaps in the regulation of organisations and as a result they are frequently co-opted by private interests and political power struggles. A constitutional reform alongside the ratification of the Right to Organise and Collective Bargaining Convention (ILO No.98) in 2017, intended to fix some of the problems like the methods for conflict resolution and arbitrage between workers and employers.

The Mexican Ministry of Foreign Affairs through the Agencia Mexicana de Coperaci Internacional para el Desarrollo (AMEXCID) established an Alianza por la Sostenibilidad (Partnership for Sustainability), as a prototype for private sector engagement on the achievement of the SDGs. In 2016, the partnership established a platform for collaboration with businesses which would establish a permanent dialogue between AMEXCID and the private sector in Mexico. Over 50 of the countrys largest corporations joined in with the dialogue via the platform, and put forward proposals for opportunities to engage with the SDGs in an international development context. However, the scheme largely focused on developing new flagship projects in strategic areas of the 2030 Agenda in order to attract foreign investment rather than fostering and supporting businesses to engage holistically with the SDGs and adopt more sustainable working practices. Similarly, the Secretary of Finance and the Development Bank Banobras have developed the Mexico Projects Hub, a web-platform to track the alignment of large infrastructure and energy projects to the SDGs with the purpose of showcasing Mexico as an attractive destination for infrastructure investment.

Mexicos National Institute of Statistics and Geography (INEGI) is the government organ in charge of the elaboration and publication of national accounts, including a number of sub-accounts measuring the economic value of healthcare, housing, household production, natural resources, the cultural sector and non-profit organisations. However, these social and environmental sub-accounts are not yet combined at the national level into a single wealth indicator. There are signs that combining them is under discussion - and Mexico has the technical capability to do so within its National Council for the Evaluation of Social Development Policy (CONEVAL) which developed the multidimensional methodology for the measurement of poverty used in the country (using data provided by INEGI) and frequently releases policy evaluations at the local and federal level.

More recently, INEGI appointed a new director with personal connections both to the current president and sub-governor of the Mexican Central Bank and there is concern that the institute could stop disclosing information that is not politically convenient for the new government.

During 2016 Mexico established a Green Finance Advisory Council to represent the financial sector, promote investment in projects with positive environmental impact and establish a long term agenda for green finance. Since then, the Mexican Central Bank has taken some initial steps aimed at exploring initiatives for greening the financial sector including hosting the first Green Finance Seminar for Central Banks and Supervisors of North, Central and South America, establishing a Sustainable Finance Committee to assess sustainability climate risk, and discussing the incorporation of climate and environmental measures into disclosure and risk management practices as well as the potential adoption of climate-related capital requirements. While Governor Diaz de Leon has expressed support for such measures, they remain proposals at this stage and government commitment is unclear.

Elsewhere, the Mexican Government has established a formal link between the national planning process and the 2030 Agenda through its SDG Sovereign Bond Framework. The framework sets out a range of green, social and sustainability bonds to be issued to fund federal budgets, including investment expenditures, subsidies, tax expenditures, operating expenditures and intervention expenditures. While there are no currently agreed definitions and standards for green bonds, the Sustainable Finance Committee has been tasked with establishing a working group to consider the future development of a sustainable taxonomy.

Despite undertaking regressive energy reforms in 2014 which lifted taxes on hydrocarbon and electricity companies, there are some signs that Mexico is beginning to consider the environmental sustainability of its fiscal and monetary policy. One of the six priorities for the National Council for the 2030 Agenda (set out in Mexicos National Strategy for the Implementation of the 2030 Agenda) aims at increasing investment in sustainable development.

In 2019, the government established a National Council for Investment, Employment, and Economic Growth Promotion (COFINECE), a consultation body to facilitate the implementation of policies, programs, and executive actions related to investment, employment creation and economic development aligned to the SDG framework though it did not go so far as to introduce sustainability criteria for public spending. The government has also established an Advisory Council on Green Finance (comprising private sector actors), though there are no signs of interest in reforming existing environmentally-harmful subsidies and incentives.

Mexicos SDG Sovereign Bond Framework, published by the Ministry of Finance, has been designed to align with the EUs Green Bond Standards; using a methodology for federal budget alignment to the SDGs. The framework sets a number of sustainability bonds to be issued to fund federal budgets, with the proceeds linked to Eligible Sustainable Expenditures spanning renewable energy, energy efficiency, control and prevention of pollution, low-carbon transportation services, and ecological buildings. In 2020, the Central Bank of Mexico joined the Network for Greening the Financial System and established a Sustainable Finance Committee to assess climate and sustainability risk to Mexicos financial stability. The future workplan for the committee includes reviewing the potential development of a national taxonomy and the greening of risk management and disclosure standards.

The Bank of Mexico bears the mandatory responsibility to perform stress testing on financial institutions, with the results published in 6-monthly Financial Stability Reports. Stress testing examines banking solvency based on historical scenarios of economical shocks in the country, with the more recent addition of geopolitical risk associated with the conflict in Ukraine and increasing global inflation.

Mexicos newly-established Sustainable Finance Committee has set out a roadmap of future work, which includes the establishment of a risk management working group tasked with upgrading practices to include climate-related risks among financial institutions. While the integration of climate scenario analysis into future risk management is being discussed, including by the Governor of Mexicos Central Bank, there are no plans for pilot climate test exercises as yet.

The Government of Mexico established a carbon tax as part of its 2013 tax reform, implemented under the Excise Tax Law (Ley del Impuesto Especial sobre Producci y Servicios). The tax is set at US$3.50 per tCO2 released during combustion and covers all fossil fuels, with the exception of natural gas. The tax is managed by a SIF ICAP enterprise called MexiCO2, established by the Mexican Stock Exchange in 2014.

Mexicos voluntary emissions trading scheme is currently in the pilot phase while the government works on its operational infrastructure (such as the registry, offset protocols and auctioning mechanism) before its intended launch in 2023.

Policy formulation in Mexico is highly centralised and, with no independent body responsible for sustainability, tends to favour and support existing state-owned (fossil-based) companies.

The National Development Plan does not apply a green economy lense to its sectoral planning policies. Concerning transport, general opportunities were identified to promote alternative transport, alongside development of a National Strategy for Electric Mobility (still unpublished). In the industrial sector, while there is emphasis on energy efficiency no particular measures are set out. Energy optimisation is the path described for the construction sector, and there is also a Green Mortgage which provides credits for energy saving improvements in homes.

While Mexico did show some early signs of progress with the creation of a Specialised Technical Committee for Sustainable Development Goals in 2013, launched a National Council for the 2030 Agenda for Sustainable Development in 2017, and reformed its 2019 Planning Law establishing the obligation to incorporate the 2030 Agenda in the National Plan of each administation this has not translated into action in terms of clear sustainability policy - budget credibility also remains a significant issue. There is no evidence of prioritisation of the SDGs in public spending beyond social protection - with expenditure on environmental protection, renewable energy and climate change systematically declining since 2019.

Support for the creation and consolidation of SMEs forms part of the Ministry of Economys Sectorial National Plan, yet there have been little to no concrete actions resulting from this commitment. There is some minimal and generalised support for microbusinesses through PRONAFIM (a National Funding Program for micro businesses), including incubation activities and capacity building for microcredit beneficiaries. Though the program does not promote green or sustainable business per se, it does adopt the social goal of promoting gender equality (with 94% of beneficiaries being women). Another insitution created with financial inclusion in mind is the government-owned Banco del Bienestar (or Wellbeing Bank). The banks Sembrando Vida scheme (which supports rural farmers to develop sustainable agro-forestry projects) was touted as having green benefits, but in practice there have been deep flaws with its implementation. Studies find that the program incentivised deforestation, in order for farmers to receive funding and plant new trees as part of the program.

Taken together, there is no targeted support for SMEs to adopt green business models, and a key step will be to reform the legal framework regulating the Mexican economy which currently favors big business leaving SMEs at a disadvantage in terms of fiscal burden, competitiveness and access to justice.

The Government of Mexico doesnt have a regulated national carbon budget in place. However, there are some local government initiatives, for instance Yucat and Jalisco have signed agreements for preparing carbon budgets and Iniciativa Climica de Mico (an Environmental Protection Organisation) prepares non-binding national carbon budgets. While these initiatives are promising, local to national scaling is not anticipated due to Mexicos highly centralised decisionmaking.

There is no evidence of any carbon budgeting proposals under discussion at the national level at this stage. Though the National Institute of Ecology and Climate Change in its 'Modelaci de descarbonizaci produnda del ssitema energico en Mico 2050' report mentions carbon budgeting as a potential mechanism for national decarbonisation.

Mexico's Nationally Determined Contribution Update mentions the increasing role of clean energy and innovation in electricity generation but does not set any specific commitments in relation to clean energy targets.

The National Development Plan emphasises the rehabilitation and expansion of existing oil refineries. Avoiding setting any clean energy targets it simply commits to including communities in energy production. Mexicos energy sector program (Programa Sectorial de la Energ) emphasises this role of communities and the local population in developing renewable energies in collaboration with the Federal Electricity Commission, but primarily emphasises improving existing sources which are largely fossil based.

There are some more positive signs in Mexicos Transition Strategy, promoting the use of cleaner technologies and fuels with the target of producing 40% of the total electricity generation using renewables by 2033 and 50% by 2050. The report also includes a chapter dedicated to green energy, electric mobility and urbanism. However, support measures for the target appear weak, with no evidence of an implementation plan, timeline of actions or any designated resources for its realisation.

Mexico has a program on the social and solidarity economy managed by the National Institute for Social Economy promoting social economy activities in production, transformation, and the consumption of goods and services. Established in connection with Mexico's Social and Solidarity Economy Law, the program aims to tackle inequality across areas such as education, culture and health, alongside developing new sustainability programs in forestry and renewable energy. However, in practice, the lack of coordination between institutions as well as between federal and local governments has led to conflicting agendas and policy priorities, effectively halting program implementation.

While the the 'Sembrando Vida' (or Sowing Life) program is a rare example of a green jobs scheme that has made it to fruition (aiming to increase rural employment and reforest 1 million hectares), its green credentials are highly suspect since donated saplings are commercial tree species and there have been widespread complaints that it increases deforestation by incentivising land owners to cut down native species to qualify for payments.

The National Inclusion Strategy has the target of providing some basic services in multiple dimensions to fight poverty. Although it has no particular green or innovative approach, it covers issues that need urgent attention in the country, such as education, health and social security and housing. The Federal budget also typically allocates its largest allocation of resources to social development.

In terms of specific programs, the Sembrando Vida program aims to tackle both rural poverty and environmental degradation by providing support to people in rural communities to regenerate degraded lands, restoring their productivity and biodiversity but in practice has suffered major challenges on implementation. Other general programs include the 'Jenes Construyendo Futuro' which aims to tackle the informal economy by linking unemployed young people with suitable businesses, and offering economic incentives for their employment. On coming into power the current administration also scrapped several social protection programs, and converted others to direct monetary transfer programs without addressing the underlying problems in Mexican public policy around implementation, monitoring and evaluation.

The right to citizen participation is enshrined in the Mexican constitution and citizens themselves can call for consultation if a sufficient proportion (at least 2%) of the electorate call for it. In 2017 plans were also announced to create an open parliament in accordance with the principles of transparency, access to information, accountability and citizen participation. So far, a legislative committee has been established to commence codifying aspects of an open parliament into law.

Elsewhere the National Development Plan states that the government will consult the population on strategic decisions at national, regional and local level before coming to a verdict - though stopping short of disclosing any specific procedures. While the government has a citizen participation website recording past consultations, it lacks details on procedures and any future events. The Advisory Council for the Energy Transition also describes itself as a permanent body for citizen consultation and participation in relation to the achievement of energy efficiency and clean energy targets, but again no further specific details are given.

In practice, policy consultation exercises in Mexico appear extremely limited, with little contact with members of the public. On occasions where consultation is sought, the exercise is further weakened by low turnouts and general participant mistrust in the process. In 2021 the General Law for Consultation of Indigenous and AfroMexican Communities was approved by the Mexican government, setting out core issues that warrant consultation and standardising procedures for doing so signalling potential strengthening of practice going forward, though the law is still due to take effect.

The National Inclusion Strategy sets out the provision of basic services with the aim of fighting poverty and guaranteeing a minimum level of social protection regarding housing and utilities services, access to health services and social security. There is also a program that supports mothers and single parents with children, which provides financial support while they study, seek employment or work. No particular green or innovative approach found.

In practice, the aid provided through these public policy programs faces major implementation challenges. The childcare budget was cut by the Federal government and a program supporting single parents with direct monetary transfers was established to replace larger resources given to private and non-profit care facilities (in the absence of public facilities) a move which has been heavily criticised by NGOs. Similarly, changes in public health services by the current administration from the Seguro Popular to a newly created "Instituto de Salud para el Bienestar has resulted in reduced resources per patient and worsened access to basic healthcare for millions of Mexicans.

Mexicos Voluntary National Report sets out concrete actions for the achievement of SDG 14 & 15, but does not go as far as to set targets or consider implementation. In terms of national policy, there is no overarching strategy document in place, but the National Strategy on Conservation and Sustainable Development of Mexican Island Territories sets out strategic actions regarding three priority areas of sovereignty, conservation and sustainable development.

The National Strategy for Sustainable Land Management, National Biodiversity Strategy of Mexico and Action Plan 2016-2030 and the Strategy for Biodiversity Mainstreaming: Fisheries and Aquaculture Sector (2016-2022) have also been developed as policy instruments for ocean and land conservation but do not adopt specific targets linked to the SDGs.

However, there are some positive examples of impact from existing policies and initiatives, including the Sustainable Forest Management Act 2003 (which placed 24 million hectares of native forest under sustainable management), the Action Plan on Species Conservation (which has protected 45 species at risk of extinction since 2017), a National System of Protected Areas and 37 Blue Flag Zones.

Mexico has had long-standing and comprehensive natural capital accounts, or Sistema de Cuentas Econicas y Ecolicas de Mico (SCEEM), in place since 1996. The Instituto Nacional de Estadtica y Geograf (INEGI) publishes accounts detailing natural resources balances and the value of national natural stocks. The accounts include items such as forest resources, hydrocarbons, groundwater, CO2 emissions, soil degradation, waste solids, raw sewage, and expenditure on environment protection though miss out the socio-cultural value of nature to different communities. SCEEM also develops monitoring indicators on market prices including resource depletion costs, environmental degradation costs and green net domestic product to make ongoing adjustments to existing national accounts. Further data is held by the Environment and National Resources Ministry (for example, the National Inventory of Air Pollutant Emissions or database on protected areas) and the National Water Commission (Drought Monitor and a National System for Water Information). However, its unclear how up to date Mexicos accounts are, with the last report issued by INEGI published in 2014.

While there is no formal natural capital body, the government does recognise some expert input on these themes from ministerial agencies. The Mexican Ministry of Environment and Natural Resources (SEMARNAT) is a mandated body with the authority to propose budgetary programs, which over the last two years included programs related to climate change, sustainability, green growth, water infrastructure and hydroagriculture. Proposals are then approved by the National Council for the Evaluation of Social Development Policy (CONEVAL), an independent body devoted to assessing the impact and performance of government social policy.

The wider context is a country lacking capacity to support an independent body, with existing ministries extremely underfunded. Most of SEMARNATs annual budget is allocated to the National Water Commission, leaving other programs and departments with large deficits in resources and even CONUAGUA faces budget constraints. Mexicos lack of fiscal space, combined with the fact that climate change and environmental protection rank among the governments lowest budget priorities, continues to ensure these issues receive little attention.

No fiscal reform planned; existing fiscal policies continue subsidising environmental damage.