1. Mexico´s dependence on fossil fuels and Climate Change policy Payment for hydrological services as a tool for climate change adaptation José Juan González Metropolitan Autonomous University Mexico UICN ACADEMY OF ENVIRONMENTAL LAW 2011 COLLOQUIUM: SOUTH AFRICA 1

2.  Mexico is responsible for no more than 1.6% of the world´s total fossil fuel-based carbon emissions, placing it thirteen in the rank of emitter countries.  However, because of its geographical conditions, Mexico is very vulnerable to climate change. Every state in the Mexican Federation is confronted with at least one considerable threat from climate change effects. A. Vulnerability to climate change 2

3.  Agriculture, health and water are sectors particularly vulnerable.  This applies especially in the northern parts of the country, where water scarcity is a central issue, and in the southern parts of the country, where tropical storms cause extensive damage to crop and livestock production.  It is expected that, by 2030, over-exploitation and pollution of aquifers will make all irrigation districts economically unsustainable. 3

4.  Given that the main source of CO2 emission is fossil fuel combustion (it contributes to 62% of the total emissions) it is logical to conclude the mitigation of climate change is possible by the simple substitution of traditional sources of energy by renewable sources of energy. Specially if we take into account that Mexico has a huge potential of renewal sources such as hydro, geothermal and wind energy.  However, given the Mexican dependence on oil sector it seems like the substitution of hydrocarbons is not possible in the short term. B. Mexican Dependence on Hydrocarbons 4

5.  It is important to mention that hydrocarbons are the main source of energy because they provide 75% of the total energy that Mexico consumes; they are also the main source of public revenue because 10% of the GDP comes from oil exportations and finally, Hydrocarbons sector is the main generator of welfare. For instance together the public monopoly of oil exploration and exploitation and the public monopoly of electricity generation provides 247 000 employs.  In addition, whereas Mexican production of hydrocarbons is dramatically decreasing during the last years, its consume is increasing. Mexico has passed of being exported to be importer of gas, gasoline and other products of oil.  So, the alternative, especially in the case of waters, is adaptation to climate change effects. C. Moving towars renewables 5

6.  Rio Lerma´s Basin in one of the most important. I crosses the country from the center to the occident (5 States) and represents 7% of the national territory where there are 19 million of inhabitants.  It has a per-capita availability of 513 m3/year and includes 4 big lakes (Chapala, Cuitzeo, Patzcuaro and Yuridia ).  The region produces the 17% of the GDP. E. Adaptation to Climate Change. The case of Rio Lerma´s Basin 6

7.  The basin is over exploited and is facing problems of:  progressive pollution of waters,  relative scarcity of its caudal,  increasing demand, and  lack of access to the waters resources.  These problems can not be addressed by using traditional tools (NWA). E. Adaptation to Climate Change. The case of Rio Lerma´s Basin 7

8.  Those using environmental services are obliged to pay to suppliers.  Environmental services : Activities address to increase water availability  Suppliers: Forest owners as well as those holders that do not use their waters concession  Users of Environmental Services; Those urban settlements, Industries, tourists companies etc.  Instruments:  The Fund  The environmental tax  The Certificate of Environmental Services  The Unit of Environmental Services F. The Bill for payment of hydrological environmental services 8

9.  Non use of previously allocated or assigned waters  Saving water from introduction of high tech agricultural irrigation systems  Good Agro-forest Management  Water rights markets  Conservation of wetlands Hydrological services as defined by the bill include: 9

10.  The bill introduces the environmental services Tax.  Those using national waters under an assignment or an allocation are obliged to pay the tax.  The tax is 0.50 USD monthly.  Tax revenue are addressed to the Fund for Payment of Environmental Services. The Environmental Services tax 10

11. Users of Environmental Services Suppliers of Environmental Services NATIONAL WATERS COMMISSION FUND FOR PAYMENT OF ENVIRONME NTAL SERVICES TAXES ADDRESSADDRESS PAYMENT Technical Council of E. S. BONUSBONUS BONUS REGISTERREGISTER ESCESC UNIT OF ENVIRONMENTAL SERVICES Allocation process 11

12.  The bill is currently under consideration of the National Waters Commission.  After that Executive could sent the bill to the Federal Congress.  Water users in the basin agree on the idea of paying for environmental services.  Those providing environmental services have expressed interest in the proposed model.  Approval by the Federal Congress is required.  Congressmen do not easily accept incorporation of non traditional instruments. Final Considerations 12