SECRETARIAT SECRETARÍA DE OF MEDIO ENVIRONMENT AMBIENTE AND Y RECURSOS NATURAL NATURALES RESOURCES Towards a Climate Market in Mexico
WHERE IS MEXICO STANDING? GENERAL CLIMATE CHANGE LAW (2012) Low-carbon emissions economy Resilient Mexico Inclusive policy NATIONAL CLIMATE CHANGE STRATEGY (2013) 10-20-40 years vision Mitigation and Adaptation actions and policies SPECIAL CLIMATE CHANGE PROGRAM * PECC 2013-2018 (2014) Actions to be carried out by federal public entities in both mitigation and adaptation throughout the current administration
ASPIRATIONAL REDUCTION GOALS GENERAL CLIMATE CHANGE LAW By 2020: 30% GHG emissions reduction with respect to baseline By 2024: 35% of electricity generation from clean energy sources By 2050: 50% GHG emissions reduction with respect to 2000 emissions
MMtCO2e SEMARNAT PECC s contribution to national mitigation efforts National baseline GWP100 1,000 900 800 760 106* MtCO 2 e/yr PECC s contribution 909 700 600 500 400 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 *The amount of 106 MtCO 2 e/year comprises: 75.1 MtCO 2 e/year from PECC 2013-2018 mitigation action lines, and 31 MtCO 2 e/year, from continuous methane reduction actions by PEMEX since 2012 (Preliminary data, under review for old and new PECCs) 4
Sectorial contribution to mitigation in PECC goals (MtCO 2 e) 0.64% 3% 13% ENERGY 40.93 AGRICULTURE 6.74 ENVIRONMENT 14.87 20% 9% 55% TRANSPORT 0.48 SOCIAL DEVELOPMENT 2.05 NAMA 9.42 TOTAL = 75.1 MtCO 2 e* *preliminary data 13
WHAT IS NEEDED TO GET READY FOR A CLIMATE MARKET? NATIONAL EMISSIONS REGISTRY CARBON TAX INVESTMENT: INNOVATION AND TECHNOLOGY ECONOMIC INCENTIVES TRANSACTIONS PLATFORM MRV CAP-AND-TRADE MECHANISM
HOW IS MEXICO GETTING READY? NATIONAL EMISSIONS REGISTRY Starting in 2015 CARBON TAX Started in 2014 INVESTMENT: INNOVATION AND TECHNOLOGY Energy Reform 2014 ECONOMIC INCENTIVES Energy Reform 2014 VOLUNTARY CARBON MARKET PLATFORM Started Nov. 2013 MRV Development in process EMISSIONS REQUIREMENTS FOR POWER GENERATION Energy Reform 2014
INDICATIVE STRUCTURE VOLUNTARY MARKET -VCS -PLAN VIVO -GOLD STANDARD -CAR -Carbon capture in forestry Norm (in development) CDM OF KYOTO PROTOCOL CLIMATE MARKET GHG and Compounds accounting and reporting >25,000 ton CO 2 e -Energy, Industry, Waste, Agriculture and Services -Direct and Indirect emissions -Mobile and Stationary sources -CO 2, CH 4, N 2 O, SF 6, HFCs, PFCs, HCFCs, NF 3 and Black Carbon CER proceeds NATIONAL EMISSIONS REGISTRY CERs, VCU, VER, PVC* portfolio CER sold Private sector manages the monetization of CERs in the UNFCCC Registry MEXICO 2 Voluntary carbon market platform in Mexico CARBON TAX Secretariat of Finance allows the use of carbon offsets to reduce carbon tax liability * After 2015
Example A TO COMPLY WITH CARBON TAX CARBON OFFSETS Carbon Tax REDUCE GHG EMISSIONS BUYER PEMEX SELLERS CDM Project A CDM Project B CDM Project C CDM Project D
Example B VOLUNTARY MARKET CARBON OFFSETS CSR REDUCE GHG EMISSIONS BUYER COMPANY A, INSTITUTION X, INDIVIDUALS TRANSACTION MEXICO 2 PLATFORM SELLERS VCS Project B
DETERMINANTS OF SUCCESS EXTERNAL ISSUES: Market terms: price, coupon, yield Demand: buyer interest Supply: availability of technology Carbon market issues: regulations, prices Competition: for buyers; for projects OTHER ISSUES: Acceptable risk Tenure, currency, etc. Domestic policies Capacity building 11
General Climate Change Direction San Jeronimo 458, third floor Col. Jardines del Pedregal 011 52 55 54 90 21 27 soffia.alarcon@semarnat.gob.mx www.semarnat.gob.mx