Mexico has recently reformed its General Climate Change Law to include its Paris Agreement commitments on a sectoral level, as well as its long-term adaptation and mitigation goals, and to establish a national emissions market—which was previously only voluntary. The law reiterates Mexico’s commitment towards the Paris Agreement’s temperature limit and to progressively increase the ambition of its target as per Article 4 of the Agreement. We consider it good practice that a country has enshrined sectoral level commitments under its unconditional Nationally Determined Contribution in its climate change legislation.
However, Mexico still plans to expand coal power, adding 590 MW of new coal-fired capacity by 2020 and delaying the reduction of electricity generation from existing coal-fired power plants until after 2024 and the retirement of some old capacity until after 2028. This is a reversal of the government’s previous plan to steadily reduce the amount of coal-based electricity from 2017, and it is inconsistent with the steps needed to achieve the Paris Agreement's 1.5°C limit. For the power sector this would mean Mexico should build no new coal plants, and emissions from the existing coal fleet should be reduced globally by two-thirds over 2020-2030 and to zero by 2050.
According to the government’s latest projections, Mexico is on track to achieve its clean energy targets of 30% and 35% by 2021 and 2024 respectively. We note that these targets allow two low-carbon, as well as zero-carbon technologies: nuclear power and cogeneration. Given the current progress of renewables auctions, we estimate that significant contributions from these two options would be required. For cogeneration to be counted towards the clean energy target it would need to achieve emissions of less than 100 gCO2/kWh.
As in previous editions of the Mexican energy outlook, nuclear power is planned to contribute significantly in later years—over 4GW or 3.5 times the current installed capacity are planned. However, no concrete schedule or budget allocation has been published by the government to build the required nuclear capacity. In the past, nuclear projects in Mexico have run considerably over schedule and budget.
Our analysis also suggests that Mexico will not meet its “Insufficient” emissions reduction targets for 2020 and 2030 and will need to implement additional policies, and reverse direction on coal to do so. Mexico has pledged to reduce its greenhouse gas emissions by 22% below baseline in 2030, equivalent to a 14% increase in emissions above 2010 level, but with current policies is on track for an 83–92% increase above 1990 levels by the year 2030.
Mexico’s Nationally Determined Contribution (NDC), covers targets for reducing GHG emissions and black carbon (BC). In its NDC, Mexico proposes to unconditionally reduce combined GHG and BC emissions by 25% below business-as-usual (BAU) in 2030. Mexico also proposes a 40% reduction of GHG and BC emissions by 2030, conditional on certain requirements for the global agreement and international support. The GHG component of these targets translates to a reduction goal of 22% below BAU unconditionally (equivalent to 14% above 2010 levels excl. LULUCF), and 36% conditionally (equivalent to 5% below 2010 levels excl. LULUCF) by 2030.
While the health and environmental benefits of reducing black carbon would be immediate and clear, the effects on global warming are complex and uncertain.
According to our analysis, Mexico will need to implement additional policies to reach its proposed NDC targets, but has begun taking steps in the right direction.
After COP21 in Paris in 2015, Mexico introduced a major new clean energy policy—its Energy Transition Law, which includes a clean energy target: 25% of electricity generation by 2018, 30% by 2021, and 35% by 2024. Our analysis reveals that the way in which this law is implemented, and the level of clean energy targeted beyond 2024, will be crucial to shaping Mexico’s GHG emissions trajectory.
Mexico’s progress in policy planning and institution building over recent years has been remarkable, including the April 2012 adoption of the General Climate Change Law (LGCC in Spanish), one of the world’s first climate laws—and the first in a developing country. Under this law, Mexico aims to reduce its emissions by 50% from 2000 levels by 2050. The NDC proposal is consistent with this objective, as is Mexico’s Mid-Century Strategy, which it submitted to the UNFCCC in November 2016.