Towards an Emissions Trading System in Mexico: Rationale, Design and Connections with the Global Climate Agenda

Front matter

Springer Climate

Simone Lucatello Editor

Towards an Emissions Trading System in Mexico: Rationale, Design

Contents

Part I Emissions Trading and Mexican Climate Policy: National and International Perspectives

1 Key Theoretical, Policy, and Implementation Experience Considerations for the Mexican ETS: Toward an Equitable Blas L. Pérez Henriquez

2 Bringing Emissions Trading Schemes into Mexican Climate PONCY i204 cannes ies tenet kenaan Er EEEE EREN 33 Alejandra Elizondo

Part II Legal Frameworks and Design Perspectives for a Mexican ETS. Building the Blocks

5 The International Influence of the Emissions Trading System A A TE EE T EE E ET 91 Alicia Gutierrez González

6 Particularities of the Legal Framework for the Mexican Rosalia Ibarra Sarlat

7 The Political Economy of Carbon Pricing: Lessons from the Mexican Carbon Tax Experience for the Mexican Cap-and-Trade Systemi ooo da a 133 Juan Carlos Belausteguigoitia, Vidal Romero, and Alberto Simpser xxvii xxviii

Part

Carbon Finance and Emission Trading in Mexico: Building Lessons from the CDM Experience and FOMECAR (Mexican

Simone Lucatello and José Eduardo Tovar Flores

Emission Trading System and Forest: Learning from the Experience of New Zealand Benjamin Rontard and Humberto Reyes Hernandez

Non-additionality, Overestimation of Supply, and Double

Counting in Offset Programs: Insight for the Mexican Carbon Market Marcela Lépez- Vallejo

María Concepción Martínez Rodriguez, Catherine Nieto Moreno, and Mariana Marcelino Aranda

II Mexican ETS Connected Issues with the Broader Climate Agenda

The Environmental Justice Dimension of the Mexican Emissions Trading System Danae Hernandez-Cortes and Erick Rosas-López

Blue Carbon in Emissions Markets: Challenges

Antonina Ivanova Boncheva and Alfredo Bermudez-Contreras

Relationship Between Emissions Trading System and the 2030

Gustavo Sosa-Nunez

Contents

Editor and Contributors

About the Editor

Simone Lucatello is a full-time researcher and professor at Instituto Mora, a Public research Centre belonging to the Mexican National Agency for Science and Technology (CONACYT) in Mexico City, Mexico.

He is one the leading authors of the IPCC, Intergovernmental Panel for Climate Change, Working Group II, which deals with the impacts, adaptation and vulnerability to climate change for the next IPCC Sixth Assessment Report (AR6, due in 2021), and coordinating leading author of the AR6 North American Chapter.

His research interests include climate change (both mitigation and adaptation) sustainability in the global south and disaster risk reduction in Latin America and the Caribbean. He served as a consultant to several international organizations such as the Inter-American Development Bank (IDB), UNEP, UNIDO, OCHA, the European Union (Europe Aid) in the Balkans, Central America and Mexico. He is member of several international academic Networks, and he is also actively engaged in international research projects across the Americas, Europe and Asia.

He holds a Master’s Degree in International relations from the London School of Economics (LSE) and a Ph.D. in Governance for Sustainable development from the Venice International University, Italy. He is member of the Mexican research system (SND, level 2.

Contributors

Mariana Marcelino Aranda SEPI-UPIICSA, Instituto Politécnico Nacional. Av. Té 950 Granjas México, Ciudad de México, México

Juan Carlos Belausteguigoitia Centro ITAM de Energia y Recursos Naturales, Ciudad de México, Mexico

Alfredo Bermudez-Contreras Autonomous University of Baja California Sur (UABCS), La Paz, Mexico

Xxix

XXX Editor and Contributors

Neydi Cruz Instituto Mora-CONACYT, Mexico City, Mexico

Alejandra Elizondo Centro de Investigación y Docencia Económicas, A.C. (CIDE), Carretera México-Toluca 3655, Col. Lomas de Santa Fe., Distrito Federal, México

José Eduardo Tovar Flores Eosol Energy de México, S.A.P.I. de C.V., Mexico City, Mexico

Alicia Gutierrez González Facultad de Estudios Globales de la Universidad Anáhuac México, Estado de México, México

Danae Hernandez-Cortes School for the Future of Innovation in Society, School of Sustainability, Arizona State University, Tempe, AZ, USA

Humberto Reyes Hernandez Facultad de Ciencias Sociales Y Humanidades, Universidad Autónoma de San Luis Potosí, San Luis Potosí. S. L. P., México

Rosalía Ibarra Sarlat Institute of Legal Research (IJ) of National Autonomous Universityof Mexico (UNAM), CDMX, México City, Mexico

Antonina Ivanova Boncheva Department of Economics and Director of APEC Studies Center, Universidad Autonoma de Baja California Sur, La Paz, Mexico

Simone Lucatello Instituto Mora/CONACYT, Mexico City, Mexico

Marcela López-Vallejo Departamento de Estudios del Pacifico (CUCSH), Centro de Estudios Sobre América del Norte, Universidad de Guadalajara, Zapopan, Jalisco, Mexico

Mireille Meneses Instituto Mora-CONACYT, Mexico City, Mexico

Catherine Nieto Moreno Centro Interdisciplinario de Investigaciones y Estudios sobre Medio Ambiente y Desarrollo, Instituto Politécnico Nacional, Ciudad de México, México

Blas L. Pérez Henríquez Precourt Institute for Energy, Stanford University, Stanford, CA, USA

María Concepción Martínez Rodríguez Centro Interdisciplinario de Investigaciones y Estudios sobre Medio Ambiente y Desarrollo, Instituto Politécnico Nacional, Ciudad de México, México

Vidal Romero Department of Political Science, ITAM, Mexico City CDMX, Mexico

Benjamin Rontard Programa Multidisciplinario de Posgrado en Ciencias Ambientales (PMPCA), Universidad Autonoma de San Luis Potosi (UASLP), San Luis Potosí, SLP, México

Erick Rosas-López Coordination for Climate Change Mitigation, Instituto Nacional de Ecología y Cambio Climático, Mexcio City, Mexico

Editor and Contributors XXXi Alberto Simpser Department of Political Science, ITAM, Mexico City CDMX, Mexico

Gustavo Sosa-Nunez Instituto Mora-CONACYT, Mexico City, Mexico

Daniela Stevens División de Estudios Internacionales, Centro de Investigación y Docencia Económicas, Ciudad de México, CDMX, Mexico

Acronyms

AAU AB32 ADB AEC AfDB AFOLU AGS AIJ BANCOMEXT BAU BMU

BMV C&T CAR CARB CDM CEC CEC

CEL CEMS CENACE CER CFE

CH,

CIF CMA

CN CO,

Assigned Amount Unit

Assembly Bill 32 (California State Law)

Asian Development Bank

Agreement on Environmental Cooperation African Development Bank

Agriculture, Forestry and Other Land Use Afforestation Grant Scheme (New Zealand) Activities implemented jointly

Mexican National Bank for Foreing Trade Business as Usual

German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety

Mexican Stock Exchange

Cap and Trade

Climate Action Reserve

California Air Resources Board

Clean Development Mechanism

Clean Energy Certificates

Commission for Environmental Cooperation between Canada, Mexico and the United States

Clean Energy Certificates (accronym in Spanish) Continous Emission Monitoring System Mexican National Center of Energy Control Certified emission reduction

Mexican Federal Electricity Commission Methane

Climate Investment Funds

Conference of the Parties serving as the meeting of the Parties to the Paris Agreement

Black carbon

Carbon dioxide xxxiii

XXXiV

COreq COA COA-WEB

CONABIO

CONAFOR CONAPO CONAVI CONCAMIN COP CORSIA

COVID19 CPEUM CPLC CPPs DAC DOE

DOF EBRD ECLAC

EDF EIB ENAREDD+

ENCC ERUs ETS EU ETS EU FFA

FOA FOMECAR GDP GEEREF GHG

GIZ

GS

HFC

HIS

HPS

IADB

Acronyms

Carbon dioxide equivalent

Annual operating certificate

Platform for reporting emissions and transfer for pollutants to obtain the annual operating certificate

Mexican National Commission for the Knowledge and Use of Biodiversity

Mexican National Forestry Commission

Mexican National Population Council

Mexican National Housing Commission

National Chamber of the Transformation Industries

UN Climate Change Conference of the Parties

Carbon Offsetting and Reduction Scheme for International Aviation

Coronavirus disease 2019

Political Constitution of the United Mexican States

Carbon Pricing Leadership Coalition

Carbon Pricing Policies

Development Assistance Committee

Designated Operational Entity accredited by CDM Executive Board

Official Gazette of the Federation

European Bank for Reconstruction and Development

United Nations Economic Commission for Latin America and the Caribbean

Environmental Defense Fund

European Investment Bank

Mexican National Strategy for Reducing Emissions from Deforestation and forest Degradation

Mexican National Climate Change Strategy

Emission Reduction Units

Emissions Trading System

European Union Emissions Trading System

European Union

Farm Forestry Association (New Zealand)

Forest Owners Association (New Zealand)

Mexican Carbon Fund

Gross domestic product

EU Global Energy Efficiency and Renewable Energy Fund Greenhouse gases

Deutsche Gesellschaft fiir Internationale Zusammenarbeit

Gold Standard

Hydrofluorocarbons

High-interest stakeholders

High-power stakeholders

Interamerican Development Bank

Acronyms

ICAO ICAP IDB IEPS IETA IFAD IFC IMF INDC INECC INEGI IPCC ITMO JI

KP LCFS LDC LET LGCC LGEEPA

LPG LRF LULUCF MDB MDG MOP

XXXV

International Civil Aviation Organization International Carbon Action Partership Inter-American Development Bank

Mexican Special Tax upon Services and Production International Emissions Trading Association International Fund for Agricultural Development International Finance Corporation

International Monetary Fund

Intended Nationally Determined Contribution Mexican National Institute of Ecology and Climate Change Mexican National Institute of Statistics and Geography Intergovernmental Panel on Climate Change Internationally transferred mitigation outcome Joint Implementation

Kyoto Protocol

Low carbon fuel standard (California)

Least Developed Countries

Mexican Law for Energy Transition

Mexican General Law on Climate Change Mexican General Law of Ecological Balance and Protection of the Environment

Liquefied petroleum gas

Linear Reduction Factor

Land Use, Land Use Change and Forestry Multilateral Development Bank

Millennium Development Goals

Members of the Protocol (Kyoto Protocol) Memorandum of understanding

Monitoring, reporting and verification

Market Stability Reserve

Megawatt

Nitrous oxide

American Climate Leadership Dialogue

National Appropriate Mitigation Actions

Natural climate solutions

Nationally determined contributions Non-governmental organization

Nitrogen dioxide

Nitrogen oxides

Natural protected areas

New Zealand Emissions Trading System

Official Development Assistance

Organisation for Economic Co-operation and Development Mexican Special Plan for Climate Change Petróleos Mexicanos, state-owned oil company

XXXVI

PFC

PFSI

PM

PM».

PMI

PMR

PRI PROFEPA PSA

R&D REDD+ RENE RETC RGGI RPS

SCC

SDG SDM SEDESOL SEDUE SEMARNAP

SEMARNAT SENER

SF6

SHCP SiCEM

Acronyms

Perfluorocarbons

Permanent Forest Sink Initiative

Particulate matter

Particulate matter with a diameter less than 2.5 micrometres Partnership for Market Implementation

Partnership for Market Readiness

Mexican Institutional Revolutionary Party

Mexican Federal Attorney for Environmental Protection Payment for environmental services

Research and development

Reducing Emissions from Deforestation and Forest Degradation Mexican National Emissions Registry

Mexican Emissions and Transfer of Pollutants Registry Regional Greenhouse Gas Initiative

Renewable Portfolio Standard of California

Social Cost of Carbon

Sustainable Development Goals

Sustainable Development Mechanism

Mexican Ministry of Inclusion and Social Welfare

Mexican Ministry of Ecology and Urban Development

Mexican Ministry of the Environment, Natural Resources and Fisheries Mexican Ministry of Environment and Natural Resources Mexican Ministry of Energy

Sulfur hexafluoride

Mexican Ministry of Finance and Public Credit

GIZ Project “Preparation of an Emissions Trading System in Mexico”

Sulfur dioxide

Sulfur oxides

Special Program of Climate Change

United Nations

United Nations Conference on Trade and Development

United Nations Development Programme

United Nations Framework Convention on Climate Change United Nations World Commission on Environment and Development

United States

US dollar

United States-Mexico-Canada Free Trade Agreement

Verified Carbon Standard

Verified Emissions Reduction

World Bank

World Business Council for Sustainable Development

Western Climate Initiative

Part I

Emissions Trading and Mexican Climate Policy: National and International Perspectives