Approximately 61 percent of Mexico’s CO2 emissions are a result of energy consumption, especially in the transportation, industrial, and residential and commercial sectors. An additional 21 percent of emissions come from activities related to land use change, including deforestation. Solid and liquid waste management accounts for another 10 percent. “Few countries in the world have done as much as Mexico to demonstrate a willingness to contribute to improving the environment and preventing climate change. We are confident that the areas of opportunity outlined in this study will help the country strengthen its development strategy and move toward building a low-carbon future,” said Laura Tuck, World Bank Sector Director for Sustainable Development in the Latin America and the Caribbean region.

Mexico is one of the most active participants in the international dialogue on climate change, and has demonstrated its resolve to address this issue by designing a Special Climate Change Program—the Programa Especial de Cambio Climático (PECC), which sets the country’s long-term climate change agenda, together with medium-term goals for adaptation and mitigation.

“A low-carbon development model in Mexico is a real and tangible possibility that can be implemented in the near term at relatively low economic and financial costs, but one that will require new incentives to overcome institutional, regulatory, and behavioral barriers,” stated Todd M. Johnson, a World Bank energy specialist and author of the study along with Claudio Alatorre, Zayra Romo and Feng Liu.The most efficient way to reduce greenhouse gas emissions, therefore, is through viable and economically efficient actions in the following areas:

• Transport: The most cost-effective actions aim to increase the percentage of trips by public transportation and improve the efficiency of the vehicular fleet. The study recommends offering private concessions and integrating public transportation and urban planning efforts at the municipal and federal levels. Such initiatives could significantly reduce emissions in this sector while improving access to homes, schools, shopping, reducing congestion and travel times, and bringing health benefits to all Mexicans.
• Agriculture and Forestry: A significant part of the CO2 emissions in Mexico arises from deforestation and land degradation. The actions in this sector include reducing deforestation, and promoting afforestation and reforestation through improved management of forests and commercial plantations. · Electric Power and Oil and Gas: Mexico’s demand for electric power and oil and gas is projected to increase substantially in the coming years. Fossil-fuel power plants could be replaced with cleaner and renewable technologies such as hydro, wind (especially in Oaxaca), geothermal and biomass. There is also large cogeneration potential in Pemex facilities that could provide up to 6 percent of total power capacity in Mexico.
• Energy Efficiency: Promoting efficient consumption in the public, residential, commercial and industrial sectors is a priority for reducing carbon emissions. These sectors combined account for 95 percent of electricity consumption and 48 percent of the total energy Mexico consumes. The energy efficiency of industrial motors and furnaces could be improved and several industries could tap their potential for industrial cogeneration.

The study points out that these types of actions could generate important collateral benefits. All of the proposed interventions would have a positive impact on energy security, health and environmental protection and some could stimulate the transfer of financial resources from carbon credits and international programs, such as the Clean Investment Funds, that promote efforts to mitigate climate change.

Low-Carbon Development for Mexico was carried out in parallel with Low Carbon, High Growth: Latin American Responses to Climate Change, the World Bank’s most important annual publication for Latin America and the Caribbean. Many of the findings of the Mexico study were presented in this report, which analyzes the repercussions of climate change in this most diverse region of the world and suggests steps countries can take to reduce its impacts.

World Bank Support to Mexico’s Low-Carbon Development Strategy In order to respond to the climate change challenge, the World Bank's Executive Board of Directors approved between 2008 and 2009 four loans totaling US$2.7 billion to support environmental sustainability in Mexico, with special emphasis on climate change.The strategy seeks to integrate environmental considerations into public policies, in order to increase competitiveness and economic and social development while simultaneously protecting the environment. The program aims to reduce air and water pollution, promote efficient use of water and energy as well as land conservation and forest resources.