Resource information
Mexico has started a number of
efforts to develop adequate policy frameworks in several
areas including the energy sector, transportation and
industrial policies, and forestry and natural resources
management. Its Climate Change Law and the National
Strategy on Climate Change envision is changing the upward
trend of its carbon dioxide emissions towards a total
decline of emission of thirty percent by 2020, and fifty
percent by 2050. Achieving these ambitious policy goals is
challenging for the country and will require many distinct
efforts to mainstream climate change in policy design.
Careful economic analysis will be critical to effectively
reduce emissions while allowing for sustainable development.
The policy evaluated in the study is part of Mexico's
policy framework to promote renewable energy. The Ministry
of Energy in Mexico, SENER, has issued a Methodology to
incorporate external costs of electricity generation. While
external costs are not privative of fossil energy, the
Mexican government has started this process by focusing on
the external costs on health and climate change, two of the
main impacts of energy use. The study analyzes the
potential of this new policy to help Mexico in its energy
and environmental goals. It is organized into five
chapters: (i) Introduction; (ii) Mexico s Policy Context for
Incorporating Externalities; (iii) Valuation of
Externalities; (iv) Internalizing Externalities; and (v)
Conclusion. Included are four annexes: Method to Value
Externalities for Mexico's Electricity Generation;
Investment Plan in the Power Sector in Mexico; Modeling
Framework and Methodology; and Project Valuation with
Environmental Externalities.
