Climate Change Mitigation in Developing Countries: Mexico Fernando Tudela El Colegio de Mexico Side Event – COP 8 October 29, 2002

MEXICO: NAFTA PARTNER MEMBER OF OECD NON -ANNEX I / DEVELOPING COUNTRY  54% OF POPULATION BELOW POVERTY LINE  MEXICO IS HIGHLY VULNERABLE TO CLIMATE – RELATED DISASTERS

Mexico: climate change action  Mexico was the first large (100 Million inhabitants), oil exporting country to ratify the Kyoto Protocol: Approval from ALL parties at Senate session April 29th 2000  Open to discussions on the evolution of commitments  Federal Government´s Committee on Climate Change (1997)  CC committees in Advisory Councils on Sustainable Development  Activities implemented jointly: ILUMEX, Scolel-té projects  Climate change included as a priority for publicly funded research 1996  GHG Inventories (1990, 1994, 1996, 1998)  Two complete National Communications to UNFCCC

Mexico´s energy sector  Energy: a constitutional State monopoly  40% of public investment to energy projects  5 th oil producing country  Oil exports: 1.7 M barrels/day  Oil taxation: 37% of all federal revenues

Origin and use of Energy 2000 Uses: Total Supply Origin: Total Demand Source: SENER, 2002 Including losses

Mexico’s GHG Emissions  Net CO 2 emissions (mid 1990´s): 2% world´s total  Mexico: the largest emitter in Latin America & the Caribbean  CO 2 from fuel combustion: 3.4 tons/ per capita (1/5 USA)  Carbon intensity (fuel comb.): 0.47 kg CO 2 / USD 90 ppp

Mexican GHGs Emissions by sector* 1996 *In terms of CO 2 equivalent Source: 2nd Nat´l Communication

Mitigation efforts LULUCF Conservation/ Sustainable utilization of natural resources Curbing deforestation Energy Improving energy efficiency Fuel substitution and pricing Source: 2nd Nat´l Communication

Mitigation costs

Land cover control  Expansion and consolidation of protected areas  Sustainable wildlife programs  Forest management programs  Reforestation As of 2000, ¼ of the area with original vegetation (70% of the land) benefits from one of those programs Still threatened: rainforests

Declining use of dirty fuels National Power Grid Coal Fuel Oil 1,709 1,574 1,015 1,013 1,299 1,016 1, Mexico % reduction Source: SENER, 2002

 Emissions by GWh (thermal) have been decreasing.  In 2002, natural gas accounted for 22.3 % of the total fuel combustion; while in 1990 it was of 16.1 %. Avoided CO 2 emissions in electric sector millions of tons of CO millions of tons of avoided CO 2 Avoided emissions Level of emissions CO 2 emissions in electric sector CO 2 emissions in thermal plants (tons of CO 2 /GWh)  Introduction of natural gas in power generation avoided million tons of CO 2 in  Acumulated avoided CO 2 amounted to 4.5 million tons between 1991 and Source: SENER, 2002

Institutional efforts I  Energy saving institutions: CONAE (1989), FIDE (1990)  Conae - Technical Norms: 674G Wh saved and 1000 MW avoided in Daylight saving time: 6329 GWh saved and 863 MW avoided since  FIDE - Energy saving programs: 1866 GWH saved and 525 MW avoided till  Mexico City develops its own climate change strategy

Institutional efforts II  PEMEX (State-owned oil/gas company) is the first oil company in a developing country to establish an internal emissions trading system (cap & trade for CO 2 )  PEMEX reduced 5% its own energy consumption Source: SENER, 2002

Energy intensity  In the last decade, energy intensity of the Mexican economy is decreasing Kilojoules / peso (GDP) Source: SENER, 2002

Decoupling emissions / GDP GDP, Internal Supply of energy, CO 2 emissions (energy sector) (1994 =100)GDP CO 2 emissions Internal Supply of energy SourceCO 2 Emissions from fuel combustion (2001) Source: IEA, CO 2 Emissions from fuel combustion (2001)

Mitigation results A plausible guess:  Mitigation efforts have resulted in a  5 % reduction of GHG emissions below BAU  Multiple ancillary benefits

Mitigation potential POTENTIAL M tons CO 2 73%: Management of temperate forests 131 M tons CO 2 53%: Combined cycle power plants (natural gas) Source: 2nd Nat´l Communication

Conclusion The case of Mexico shows that: A large, oil exporting, developing country may:  Build up institutional capacity  Achieve mitigation results, based upon self- interest  Support the Kyoto process as a State policy