April 22, 2012

Mexico's lower house passes climate change law

Mexico is one step closer to having a comprehensive law on climate change after its lower chamber passed the General Law on Climate Change late yesterday.

Mexico's house-passed General Law on Climate Change puts in place an important framework for emissions reductions from critical sectors and establishes key authorities and institutional structures. The bill now heads back to the Senate, which overwhelmingly passed an earlier version.

Now the bill’s final passage is in a race against time before the congressional session adjourns at the end of this month. In the next couple weeks, the bill has to clear its last two hurdles to become law: 1) passage by the Senate, which overwhelmingly passed an earlier version of the bill in December, and 2) signature by President Felipe CalderĂ³n.

A full analysis of the new bill, which passed 280-10 with one abstention, is still pending, but we highlight a few of the broader elements below.

Mexico’s General Law on Climate Change, as passed by the lower chamber:

  • Reiterates in domestic law the country’s aspirational long-term greenhouse-gas emissions mitigation goals pledged under the UN Framework Convention on Climate Change to reduce its emissions 30% below business-as-usual emissions by 2020, and 50% below 2000 levels by 2050.
  • Establishes a high-level climate change commission, a climate fund and mandatory emissions reporting and establishes a  national emissions registry. Also transforms the current National Institute of Ecology to the National Institute of Ecology and Climate Change. (These provisions were also included in the previous Senate-passed bill.)
  • Requests the Ministry of Finance and relevant energy ministries to develop a system of incentives by 2020 that favors the use of renewable energy. Establishes goals for increasing electricity generation from renewable sources, including an aspirational target of 35% of electricity generation to come from renewable sources by 2024.
  • Enables, but does not mandate, the creation of a domestic greenhouse-gas emissions trading system.
Several analyses, including from the World Bank, indicate that across the economy Mexico already has available abundant low-cost, or even profitable, opportunities for reducing carbon emissions.

EDF’s own preliminary economic analysis shows a Mexican emissions trading system could both attract international investment and propel Mexico to achieve the country’s current carbon reduction goals at low cost, and possibly significant profit, if the system were to include an absolute carbon cap set near their current target and allow trading both domestically and in international markets.

Binding domestic targets are the strongest way for Mexico, or any country, to ensure it will meet its mitigation goals and maximize the full potential of future international carbon markets. This legislation doesn't go quite that far; however, it does put in place an important framework for emissions reductions from critical sectors; establish key authorities and institutional structures; and send a message to industries that would hopefully further incentivize future low-carbon development.

We are excited and optimistic about Mexico’s continued momentum to attack climate change at the national level. This legislation is a strong step in the right direction toward a healthier climate in Mexico and around the world. And with so many opportunities to benefit economically from taking strong action on climate change, we are hopeful that Mexico will realize this law's full potential and continue its record of climate leadership by further strengthening the rules in the future.


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