Development & Aid, Environment, Tierramerica

Mexico Yet to Cross Clean Energy Threshold

MEXICO CITY, Jun 8 2009 (IPS) - Mexico, chosen as this year's headquarters for celebrations of World Environment Day, is lagging behind in developing renewable energy sources.

Despite its great potential for energy from the sun, wind and water, Mexico has not taken advantage of the Clean Development Mechanism laid out in the Kyoto Protocol climate change agreement.

Mexico, responsible for 1.5 percent of the world's climate changing emissions, was chosen by the United Nations as the host for the main celebrations of World Environment Day, June 5.

The most recent available official data on greenhouse gas emissions, from 2002, indicate that this country released 643 million tons of carbon dioxide per year: 61 percent from the generation and consumption of energy, 22 percent from industry and 14 percent from deforestation.

Electricity, which is produced primarily in plants run on fossil fuels, contributes some 114 million tons of carbon emissions annually in Mexico.

Based on that tally, Mexico could make better use of CDM projects to develop wind, solar and geothermal sources, energy efficiency and fossil fuel substitution, which would allow the country to cut its emissions by some 130 million tons, according to the Mexican Carbon Fund (FOMECAR).

Mexico registered 115 CDM projects, but just 10 percent are being executed. By May, 5.7 million carbon emissions reduction certificates had been issued.

The objective of CDM is that the industrialized nations will invest in projects to reduce emissions in developing countries as a way to offset emissions in their own countries.

In this way, the countries of the North obtain credits in their favor, as if they had reduced their greenhouse emissions.

But “the CDM is in a transition phase, it's been exhausted. In Mexico's case, the number of projects and quantity of credits issued have been somewhat disappointing,” Gabriel Quadri, former director of the government's National Ecology Institute and director of the company Ecosecurities, told Tierramérica.

That company is dedicated to advising CDM initiatives and to issuing carbon emission credits. The entities in developing countries that engage in CDM efforts must register their project and demonstrate that it captures or reduces greenhouse gases in order to sell those carbon credits to industrialized countries. The Kyoto Protocol, in force since 2005, requires the industrialized countries that ratified it to curb their climate changing emissions an average of 5.2 percent below 1990 levels by 2012.

But “the CDM has turned into a way of marketing the credits, and has not met the objective of promoting sustainable development,” criticized María José Cárdenas, energy and climate change coordinator for the environmental group Greenpeace-Mexico.

In Mexico, “there is great potential for energy efficiency. A great deal of energy is consumed and there is a lot of waste,” said Miguel Breceda, researcher for the Energy Program at the Autonomous University of Mexico City.

The World Bank report, “State and Trends of the Carbon Market 2009,” estimated that in 2008 there were 705 million dollars in transaction, with certificates equivalent to 123 million tons of carbon. Latin America represents just four percent of that market.

A credit issued in Mexico is traded on the international carbon markets at 11 to 14 dollars, about a third of the value it had in July 2008. In this country, only 45 companies voluntarily reported their carbon emissions and 27 trade their reductions on the market.

In 2006, FOMECAR was formed. It is a multidisciplinary trusteeship to provide technical and financial assistance to sustainable development and climate change mitigation projects.

The entity, established by the government's National Bank for Foreign Trade and the non-governmental Mario Molina Center, receives contributions in Mexico and from European international cooperation sources.

FOMECAR has already authorized nine projects at a budget of one billion dollars, equivalent to about 2.7 million carbon credits, and has identified 80 potential projects worth approximately 13.4 billion credits annually.

The trusteeship aims to establish a national carbon Market, encouraging more Mexican companies to take part.

In May, the Renewable Energy and Energy Efficiency Partnership announced financing for a study on the creation of a carbon credit market for Mexico's automotive industry, carried out by the non-governmental Center for Sustainable Transport.

The goal of the Partnership, based in Vienna, is to give a push to the global market for sustainable energy.

The evolution of the CDM depends on the negotiation of a treaty that will replace the Kyoto Protocol after it expires in 2012. The talks are slated for an international meet to take place in December in Copenhagen.

Breceda proposes simplifying the CDM paperwork and processes. “They were developed to avoid projects that don't demonstrate viability or that had overlapping subsidies. The legislation needs to be more flexible,” he said.

In Quadri's opinion, Mexico should take on obligatory commitments under the new climate treaty, which would help strengthen its carbon market.

“The CDM will have to remain for the countries that are not as developed, the smaller ones, not like Mexico, which can no longer play at being a country in transition,” said Cárdenas, who proposes an emissions reduction program for the most polluting sectors, like the petroleum, electrical and cement industries.

The World Bank report concluded that, so far, the CDM has failed to register more than 430 projects per year. In March, worldwide, there were more than 4,500 projects awaiting approval.