This entry was written by Janne Rohe, who works at the Heinrich Boell Foundation’s Regional Office for Mexico, Centralamerica and the Caribbean.
Climate finance has played an important role in the ongoing debates within climate change negotiations and is one of the relevant issues to be discussed at COP 16. Yet the debate has focused so far more on donor than on recipient countries.
Although in Mexico climate finance has been a popular topic at governmental level and for the Mexican delegation within UNFCCC negotiations, the international debate has not yet reached all sectors and local agendas in the country. This is why the Mexican NGO Centro Mexicano de Derecho Ambiental (Mexican Center of Environmental Law) in coordination with the World Resources Institute (WRI), Oxfam Mexico and the Mexican Office of the Heinrich Boell Stiftung (HBS) organized a two-day workshop “Financing the change, without changing the climate” in Mexico City in mid July. Actors from civil society, the private sector and the academic field participated on this occasion and learned about recent international negotiations, finance mechanisms and institutions, open challenges, criteria for a possible agreement and financial options for Mexico. The discussions during the workshop mainly reflected the discourse on the national level.Mexico plays an important role within the climate finance debate in different respects: apart from being host of the next COP in Cancún which could enable the Mexican delegation to take a leadership role in bringing forward climate finance issues, Mexico itself has attached big importance to these issues since the COP 14 in Poznan (2008) where it presented a proposal for a Mexican Green Fund. This proposal which suggests the creation of an international, transparent, democratic and accessible finance mechanism with quotas and obligatory and differentiated contributions, forms the basis for a declaration of intent for a Copenhagen Green Fund given at COP 15. In Cancún, the Mexican delegation will try to make progress on mainly two climate finance points: agreeing on an initial fund for REDD and on how to operationalize fast track funding.
While Mexico had a strong international presence on climate finance issues, a domestic debate was largely absent. This is beginning to change. At the moment, the Mexican national debate on climate finance centers on the General Climate Change Law initiative, the economic impacts of climate change within the country and the governmental Special Climate Change Program.
The law (here information in Spanish), presented in March 2010 by senator Alberto Cárdenas Jiménez, member of the governmental party PAN is supposed to be voted on by the end of the year. It proposes the creation of a national system as well as an intergovernmental federal commission in order to define the mitigation and adaptation strategy at national (federal and state) level. It is mainly based upon the creation of a national emission register and emission market and the implementation of carbon taxes which is why it has been partly criticized by civil society and environmental organizations.
Mexico is considered a very vulnerable country in terms of climate change impacts which is why the economic dimension of climate change has been analyzed and recognized at governmental level. Taking actions against climate change (for mitigation and adaptation) would with an estimated 2 percent of GDP annually would cost less than not taking measures to slow down climate change. The economic losses of inaction in Mexico could amount to 7 percent of GDP annually (see here for information in Spanish).
Still it seems to be difficult to convince the Ministry of Finance (which indeed plays a very important role in this financial game) of the economic dimensions mentioned above, since it has been – so far – mainly the Ministry of the Environment and Natural Resources that took responsibility in pointing out these results and acting on it. This emphasizes the urgent necessity of intersectoral climate change policies, which would involve the participation of different ministries as well as coordination between international, national and local policies. This also applies to finance mechanisms, especially because most of the existing funds are designed at international level, whereas there are striking deficiencies at the level of country beneficiaries with regard to capacities to realize and implement climate change policies and funds. It must be clear that additional funds and money are necessary for Mexico but are by far not sufficient, in the absence of any accompanying activities and capacity building in order to assure that the funds will be well managed, monitored, evaluated and implemented adequately at national and local level. It is indispensable to connect and integrate international funding within already existing national and local climate change policies and programs, so that synergies and sustainable progress can be achieved.
In 2008 the Mexican government announced the Special Climate Change Program (Programa Especial de Cambio Climático, PECC), which is the national strategy for 2009-12. It includes detailed mitigation and adaptation actions, objectives and goals for Mexico, including a long-term vision of a 50 percent emissions reduction by the year 2050 (based on 2000 emission levels). Unfortunately the PECC is inadequately funded to fulfill its goals.
Mexico has been a big beneficiary of international climate finance- especially through the World Bank’s Clean Technology Fund (CTF). The Mexican investment plan for the CTF comprises 500 million US$ from CTF funding (plus 5,7 billion US$ co-financing from the Interamerican Development Bank, the International Finance Corporation and the International Bank for Reconstruction and Development), which means that Mexico, besides South Africa, receives the biggest amount of the so far 13 endorsed CTF investment plans worldwide .
The projects to be realized are planned within the sector of urban transport, renewable energies and energy efficiency. Prior to his visit in the country, World Bank President Zoellick recently stressed Mexico’s role as a leader in climate change issues and pointed out the strong alliance between the World Bank and Mexico. Mexico has the second largest portfolio of World Bank projects in Latin America.
There are many voices critical of the World Bank’s emerging role as “Climate Bank” with a big international mandate in climate financing. It remains to be seen if the UNFCCC negotiations in Cancun and at the COP 17 in South Africa will consolidate the World Bank’s role in climate finance or if it adopts a new climate finance architecture under the control and leadership of the UNFCCC. In any case, it should be a priority of any international climate financing instruments to consider and work together with all levels (national, regional, local), as well as sectors (governmental institutions, civil society and academic field) in order to assure a broad and sustainable impact and development at the national level.
Photo: Esparta with Creative Commons License
Tags: climate finance, Mexico, UNFCCC, World Bank
