Sectoral analysis

Report
Progress report of the Green Economy
Study for Mexico
Dra. Amparo Martínez Arroyo
Nineteenth Meeting of the Forum of Ministers of
Environment for Latin America and the Caribbean
Los Cabos, Baja California. March 13th, 2014
Why to undertake a Green Economy Study
for Mexico?
• Need for an accurate and solid perspective about the
possible futures to:
– Reduce inequality
– Increase welfare and economic growth
– Preserve and improve the environment and natural resources
• Need to go beyon isolated sectoral analysis and link them
to analysis of changes to the entire economy.
• Desire to enhance capacity to update and improve the
analysis periodically, in response of the changing context
(social, environmental and economic)
Study Development Process
Release of the Report Towards a Green Economy by UNEP
Formal
launching
Memorandum of Understanding about Green Economy
SEMARNAT
UNEP
SPONSORS
Institutional
Collaboration
Arrangements
CONSULTANTS
Institutes that contributed with
financial and human resources to
the study
Economists that developed
quantitative and qualitative analysis
INECC
Coordination, supervision and
technical revision
Expertos en cada
uno de los temas sectoriales
Well known
experts in green economy studies
Economic EXPERTS
Analysis
through an
Steering
Committee
Review and
Advisory work
ADVISORS
First Meeting: Introduction to the Green Economy Study for
Mexico project
Second Meeting: Presentation of the structure and the
working team
Third Meeting: Preliminary Results
UNEP’s Green Economy
Initiative
Comisión Económica para
América Latina y el Caribe
Mario Molina Center for Strategic Studies in Energy and
the Environment
Validation by the Steering Committee
Sectors Analyzed in the Study
• Agriculture
• Water
• Forestry
• Fisheries
• Industry
• Energy
• Tourism
• Transport
Criteria for inclusion of sectors/relevant themes:
• Direct dependence on the natural capital.
• Contribution to employment and the population livelihood.
• Participation in the national production of the entire economy
Methodological approach of the integrated
cross-sectorial analysis
Social impacts
Employment creation/loss
and income generated
National
Analysis
(general
equilibrium
model)
Economic impacts
Investment required for
green economy
interventions and avoided
costs
Natural resources and
environmental impact
Sectoral
analysis
(system
dynamics
model)
Availability and demand of
natural resources
General equilibrium model
Analyzes the interaction of economic
agents and the relationships of the
markets that work simultaneously at a
national level.
System dynamics model
Analyzes in detail the interaction of
the economic, social and biophysical
variables within each productive
sector.
Example of green economy scenarios related
to energy subsidy removal/1
Results of the Green Economy National Analysis
(modelling for the year 2030)
Social
GHG
Investment in
Gross
welfare emissions
Social
renewable
Domestic Investment
Scenario
expenditure
energy and
Product
energy efficiency
B
No
No
C
Yes
(100%)
No
D
No
Yes
(100%)
Yes (50%)
Yes
(50%)
E
Note: /1. The energy subsidy includes electricity, gasoline, diesel, and liquefied
petroleum gas.
Modelling example: analysis of the energy subsidy
removal
What do we
know about
energy
subsidies in
Mexico?
¿What do we
need to know?
 They are regressive: 20% of the households with the greater
income receive 50% of the subsidy. 20% of lower-income
households receive only 4%.
 They pressure the public finances : from the year 2006 till
2012, energy subsidies account for 1.8% of the national GDP.
 They are environmentally harmful: foster
the
overexploitation of natural resources and encourage energyintensive activities.
 How to alleviate undesirable impacts of the subsidy removal
(v.gr. Social conflicts, income of the poorest?
 How to maximize the benefits of the freed resources?
 How to incorporate externalities (social costs) of energy?
Linkages between the Study and national policy
Government plans
and programmes
National
Development Plan
2013 -2018
Development process of
the Green Economy Study
for Mexico
Sectoral
Programmes 20132018
Appropriate time to influence
current policy instruments as
an input for its design
Climate Change National
Strategy vision 10-20-40
Energy National
Strategy 20132027
Special Climate
Change Programme
2013-2018
Next steps and final conclusion…
▪ This
experience was useful to increase the national modelling and
analysis capacities.
▪ The
analysis enables a national dialogue to identify opportunities of
technological development, the generation of employment and
identifying the synergies in different sectors.
▪ Latin America and the Caribbean national studies can set up a dialogue
that displays the elements for a regional initiative, using a bottom up
approach.
▪ Mexico offers its expertise derived from the developing of this study
that has to be dynamic and continuous work
▪ There
is an opportunity to include young generations to the
development of studies with a environmental integral approach
Main sponsors
Green Economy Study for Mexico
(May 2014)
with the support of

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