Mid-terM progress report of the environMental perforMance review of Mexico

DeceMber 2017

Mid-term Progress Report of the Environmental Performance Review of Mexico

December 2017

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MID-TERM PROGRESS REPORT OF THE ENVIRONMENTAL PERFORMANCE REVIEW OF MEXICO

Table of contents

Abbreviations and acronyms ................................................................................................................ 5

Introduction ......................................................................................................................................... 11

Progress in recommendations ............................................................................................................ 12

1. Policy making framework ............................................................................................................... 12

1.1. Strengthening of environmental planning, regulation and management .................................... 12 1.2. National framework on evaluation .............................................................................................. 16 1.3. Evaluation of programs in the environmental sector .................................................................. 16 1.4. Comprehensive performance assessment of federal programs linked to conservation and protection of the environment 2014-16. .............................................................................................................. 17 1.5. Greater presence of environmental issues in the national evaluation policy agenda. ................. 18 1.6. Impact evaluation of the payment for Environmental Services Sustainable Forest Development Program (S219). ................................................................................................................................. 18 1.7. Climate change assessment ......................................................................................................... 18 1.8. Inter-secretarial co-ordination. .................................................................................................... 19 1.9. Strengthening the environmental policy evaluation agenda ....................................................... 19 1.10. More robust international, national and institutional legal frameworks in terms of access to public information......................................................................................................................................... 20 1.11. Strengthening of the environmental governance ...................................................................... 20 1.12. Mechanisms of social participation and gender equality .......................................................... 21 1.13. Environmental information ....................................................................................................... 21

2. Towards a green growth ................................................................................................................. 23

2.1. Gradual phase out of gasoline and diesel implicit subsidy ......................................................... 23 2.2. Excise taxes on energy products ................................................................................................. 26 2.3. Taxes on new cars (ISAN) .......................................................................................................... 28 2.4. Tax on vehicle ownership ........................................................................................................... 28 2.5. Waste charging system ............................................................................................................... 30 2.6. Informal sector in waste management ........................................................................................ 31 2.7. Public-private partnerships ......................................................................................................... 32

3. Climate change ................................................................................................................................ 35

3.1. Implementation of the LGCC (general law on climate change) ................................................. 35 3.2. Planning instruments ................................................................................................................... 36 3.3. Economic and financial instruments ........................................................................................... 36 3.4. Monitoring and evaluation instruments ...................................................................................... 38 3.5. Mechanisms for co-ordinating climate change policy ................................................................ 39 3.6. International commitments on climate change ........................................................................... 39 3.7. Emissions reports and inventories .............................................................................................. 41 3.8. Improvement in energy efficiency .............................................................................................. 42 3.9. Energy efficiency objectives (medium and long-term goals) ..................................................... 43 3.10. Efficiency standard for new cars ............................................................................................... 45 3.11. Mandatory vehicle inspection programs ................................................................................... 45

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3.12. Instruments for adaptation to climate change policy. ............................................................... 46

4. Forests and biodiversity .................................................................................................................. 49

4.1. Economic value of biodiversity .................................................................................................. 52 4.2. Initiative on the economics of ecosystems and biodiversity (TEEB) ......................................... 53 4.3. EcoValor Mx initiative - natural protected areas (CONANP) .................................................... 53 4.4. System of environmental-economic accounting, experimental ecosystem accounting. (SEEA-EEA-Mexico) ..................................................................................................................................... 54 4.5. Use of economic assessment for compensation of environmental damage, federal law of environmental responsibility (equivalence criteria) ........................................................................... 54 4.6. Other initiatives for economic assessment of biodiversity in Mexico ........................................ 54 4.7. Entrance fee to natural protected areas ....................................................................................... 55 4.8. Payment for environmental services (PES) ................................................................................ 55 4.9. Subsidies for reforestation .......................................................................................................... 56 4.10. Pesticide taxes ........................................................................................................................... 56 4.11. Management units for the conservation of wildlife system ...................................................... 57 4.12. Instruments for the rescue and conservation of the Vaquita Marina ........................................ 58 4.13. Forest certification .................................................................................................................... 60 4.14. Certification of the tourism sector ............................................................................................ 60

Annex A. Table of selected indicators ................................................................................................ 62

Annex B. Actions taken on recommendations from the last EPR ................................................... 64

Tables

Table 1.1. Conservation and protection of natural Resources SEMARNAT’s federal programs 2014-1617 Table 1.2. Index of Citizen Participation in the environmental sector 2013-17 .................................... 21 Table 2.1. Fees applied to ISAN according to different price ranges .................................................... 28 Table 2.2. Charges for waste collection service in Cuetzalan del Progreso, Puebla ............................. 31 Table 2.3. Projects of public-private partnerships in the field of waste management ........................... 33 Table 3.1. Total fuel tax revenue ........................................................................................................... 37 Table 3.2. International Donations for Mexico's compliance with its international commitments on

climate change and biodiversity .................................................................................................... 37 Table 3.3. Minimum annual goal of clean energy participation in the generation of electricity ........... 43 Table 4.1. Area under forest management (thousands of ha) ................................................................ 60

Table A B.1. International co-operation ................................................................................................ 76 Table A B.2. Co-operation offered by Mexico ...................................................................................... 77

Figures

Figure 2.1. Evolution of gasoline prices ................................................................................................ 24 Figure 2.2. Subsidies on to gasoline and diesel (millions of USD) ....................................................... 25 Figure 2.3. Taxes or subsidies on gasoline and diesel as a percentage of GDP .................................... 25 Figure 2.4. Collection of IEPS for transportation fuels ......................................................................... 26 Figure 2.5. Relationship between the tax rates of the carbon IEPS and emission factor ...................... 27 Figure 2.6. List of states has a tax on vehicle ownership in Mexico ..................................................... 29 Figure 3.1. Evolution of climate change policy..................................................................................... 35

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Figure 3.2. Mitigation goal of GHG emissions by sector ...................................................................... 40 Figure 3.3. Energy reform on renewable energies................................................................................. 42 Figure 3.4. Energy losses due to electricity transmission ...................................................................... 43 Figure 4.1. Implementation costs of the ENBiomex ............................................................................. 50 Figure 4.2. Area with resources allocated for inclusion in the PES for the 2013-17 period (ha) .......... 56 Figure 4.3. Federal government tax revenues from pesticide taxes (millions of pesos) ........................ 57 Figure 4.4. Area of management units for wildlife conservation (UMA), 2017 ................................... 58 Figure A B.1. Relationship between CO2 emissions and ISAN ............................................................ 69

Boxes

Box 1.1. Policy making framework: Recommendation 1 ..................................................................... 12 Box 1.2. Policy making framework: Recommendation 2 ..................................................................... 16 Box 1.3. Policy making framework: Recommendation 3 ..................................................................... 19 Box 2.1. Towards a green growth: Recommendation 1 ........................................................................ 23 Box 2.2. Towards a green growth: Recommendation 2 ........................................................................ 28 Box 2.3. Towards a green growth: Recommendation 3 ........................................................................ 29 Box 2.4. Towards a green growth: Recommendation 5 ........................................................................ 30 Box 3.1. Climate change: Recommendation 1 ...................................................................................... 35 Box 3.2. Climate change: Recommendation 3 ...................................................................................... 42 Box 3.3. Climate change: Recommendation 6 ...................................................................................... 45 Box 3.4. Climate change: Recommendation 8 ...................................................................................... 46 Box 4.1. Forests and biodiversity: Recommendation 1 ......................................................................... 49 Box 4.2. Forests and biodiversity: Recommendation 2 ......................................................................... 51 Box 4.3. Forests and biodiversity: Recommendation 3 ......................................................................... 52 Box 4.4. Forests and biodiversity: Recommendation 4 ......................................................................... 55 Box 4.5. Forests and biodiversity: Recommendation 6 ......................................................................... 59

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Abbreviations and acronyms

AMEBIN Mexican Alliance of Biodiversity and Business (Alianza Mexicana de Biodiversidad y Negocios)

AMEXCID Mexican Agency for International Development Cooperation (Agencia Mexicana de Cooperación Internacional para el Desarrollo)

AMIA Mexican Association of the Automotive Industry (Asociación Mexicana de la Industria Automotriz)

ANVCC National Atlas of Vulnerability to Climate Change (Atlas Nacional de Vulnerabilidad ante el Cambio Climático)

APEC Asia-Pacific Economic Cooperation APF Federal Public Administration (Administración Público Federal) ASEA Security, Energy and Environment Agency (Agencia de Seguridad, Energía y

Ambiente) ASERCA Agency for Marketing Services and Development of Agricultural and livestock

Markets (Agencia de Servicios a la Comercialización y Desarrollo de Mercados Agropecuarios)

ASF Superior Audit of the Federation (Auditoría Superior de la Federación) ASI Aspects Susceptible for Improvement ATP Preventive Technical Audit (Auditoría Técnica Preventiva) BANCOMEXT National Bank of Foreign Trade (Banco Nacional de Comercio Exterior) BANOBRAS National Bank of Public Works and Services (Banco Nacional de Obras y Servicios

Públicos) BIOFIN Biodiversity Finance Initiative (Iniciativa Finanzas de la Biodiversidad) BRT Bus rapid transit BUR Biennial Update Report CAF Cancun Adaptation Framework CAME Megalopolis Environmental Commission (Comisión Ambiental de la Megalópolis) CBD Convention on Biological Diversity CEC Commission for Environmental Cooperation CCDS Advisory Councils for Sustainable Development (Consejos Consultivos para el

Desarrollo Sustentable) CCVC Short- lived Climate Pollutants (Contaminantes Climáticos de Vida Corta) CDI National Commission for the Development of Indigenous People (Comisión

Nacional para el Desarrollo de los Pueblos Indígenas) CEC Commission for Environmental Cooperation CEFP Center for Public Finance Studies (Centro de Estudios de las Finanzas Públicas)

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CEGAM Center for Specialists in Environmental Management (Centro de Especialistas en Gestión Ambiental)

CEMDA Mexican Center for Environmental Law (Centro Mexicano de Derecho Ambiental) CENAPRED National Center for Disaster Prevention (Centro Nacional de Prevención de

Desastres) CESPEDES Committee on Private Sector Studies for Sustainable Development (Comisión de

Estudios del Sector Privado para el Desarrollo Sustentable) CFE Federal Electricity Commission (Comisión Federal de Electricidad) CICC Intersecretarial Climate Change Commission (Comisión Intersecretarial de Cambio

Climático) CIMARES Intersecretarial Sustainable Management of Oceans and Coasts Commission

(Comisión Intersecretarial para el Manejo Sustentable de Mares y Costas) COFECE Federal Commission of Economic Competition (Comisión Federal de Competencia

Económica) CONABIO National Commission for the Knowledge and Use of Biodiversity (Comisión

Nacional para el Conocimiento y Uso de la Biodiversidad) CONACYT National Council on Science and Technolog (Consejo Nacional de Ciencia y

Tecnología) CONAFOR National Forestry Commission (Comisión Nacional Forestal) CONAGUA National Water Commission (Comisión Nacional del Agua) CONANP Natural Protected Areas National Commission (Comisión Nacional de Áreas

Naturales Protegidas) CONAPESCA National Commission of Aquaculture and Fisheries (Comisión Nacional de

Acuacultura y Pesca) CONEVAL National Council of Social Development Policy Evaluation (Consejo Nacional de

Evaluación de la Política de Desarrollo Social) CONUEE National Commission for the Efficient Use of Energy (Comisión Nacional para el

Uso Eficiente de la Energía) COP Conference of the Parties CPTPP Comprehensive and Progressive Agreement for Trans-Pacific Partnership CRE Energy Regulatory Commission (Comisión Reguladora de Energía) DGVS Wildlife General Directorate (Dirección General de Vida Silvestre) DOF Official Journal of the Federation (Diario Oficial De La Federación) EPE Environmental Performance Evaluation EEA Experimental Ecosystem Accounting EIA Environmental Impact Assessment EIS Environment Impact Statement ENACC National Climate Change Strategy (Estrategia Nacional de Cambio Climático) ENAREDD REDD+ National Strategy (Estrategia Nacional REDD+ ) ENBIOMEX National Biodiversity Strategy (Estrategia Nacional sobre Biodiversidad en México) EPA Environmental Protection Agency EPE Environmental Performance Evaluation FAO Food and Agriculture Organization of the United Nations

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FCC Climate Change Fund FINANP Financing for new Natural Protected Areas (Financiamiento de nuevas áreas

naturales protegidas) FINNOVA Sectorial Innovation Fund (Fondo Sectorial de Innovación) FIRA Trust Funds for Rural Developmen (Fideicomisos Instituidos en Relación con la

Agricultura) FMCN Mexican Fund for the Conservation of Nature (Fondo Mexicano para la

Conservación de la Naturaleza) FONADIN National Infrastructure Fund (Fondo Nacional de Infraestructura) FSC Forest Stewardship Council FSUE Universal Electricity Fund (Fondo de Servicio Universal Eléctrico) FTA EU-MX Free Trade Agreement between Mexico and the European Union GCF Green Climate Fund GDP Gross Domestic Product GEF Global Environment Facility Fund GHG Greenhouse gases GIZ German Agency for Technical Cooperation Hydrological PES Payment for Hydrological Environmental Services (Pago por Servicios Ambientales

Hidrológicos) IDB Inter-American Development Bank IEPS Special Tax on Production and Services (Impuesto Especial sobre Producción y

Servicios) IMP Mexican Petroleum Institute (Instituto Mexicano del Petróleo) IMTA Mexican Institute of Water Technology (Instituto Mexicano de Tecnología del

Agua) INAFED National Institute for Federalism and Municipal Development (Instituto Nacional

para el Federalismo y el Desarrollo Municipal) INECC National Institute of Ecology and Climate Change (Instituto Nacional de Ecología y

Cambio Climático) INEGI National Institute of Statistics and Geography (Instituto Nacional de Estadística y

Geografía) IPCC Intergovernmental Panel on Climate Change ISAN Impuestos Sobre Automóviles Nuevos (Taxes on New Cars) KFW German Development Bank LFRA Federal Law on Environmental Responsibility (Ley Federal de Responsabilidad

Ambiental) LGCC General Law on Climate Change (Ley General de Cambio Climático) LGEEPA General Law on Ecological Balance and Protection of the Environment (Ley

General del Equilibrio Ecológico y la Protección al Ambiente) LPG Liquid petroleum gas LTE Energy Transition Law (Ley de Transición Energética) MARPOL Agreement International Convention for the Prevention of Pollution by Ships MIR Results Indicator Matrix (Matrices de Indicadores para Resultados)

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NADB North American Development Bank MXN Mexican peso NAFIN Mexican Development Bank (Nacional Financiera) NAFTA North American Free Trade Agreement NDC Nationally Determined Contributions NMX Mexican Voluntary Standard NPA Natural Protected Areas (Áreas Naturales Protegidas) OECD Organisation for Economic Cooperation and Development OIC Internal Audit Office (Órgano Interno de Control) PDIA Institutional Development Environmental Program (Programa de Desarrollo

Institucional Ambiental) PECC Special Climate Change Program (Programa Especial de Cambio Climático) PEF Federal Budget of Expenditures (Presupuesto de Egresos de la Federación) PEMEX Petróleos Mexicanos PES Payment for Environmental Services PET Polyethylene terephthalate PETE Special Energy Transition Program (Programa Especial de Transición Energética) PNH National Water Program (Programa Nacional Hídrico) PNPGIR National Program for the Prevention and Integral Waste Management (Programa

Nacional de Prevención y Gestión Integral de Residuos) PPP Public private partnerships PRESEM Energy Efficiency and Sustainability Project in Municipalities (Proyecto de

Eficiencia y Sustentabilidad Energética en Municipios) PROCAPTAR National Program for Rainwater Collection and Ecotechnics in Rural Areas

(Programa Nacional para Captación de Agua de Lluvia y Ecotecnias en Zonas Rurales)

PROCER Program for the Recovery and Repopulation of Endanger Species (Programa de Recuperación y Repoblación de Especies en Peligro de Extinción)

PROCID Program of International Cooperation for Development 2014-2018 (Programa de Cooperación Internacional para el Desarrollo 2014-2018)

PROCODES Conservation Program for Sustainable Development (Programa de Conservación para el Desarrollo Sostenible)

PRODERMAGICO Sustainable Regional Tourism Development and Pueblos Magicos Program (Programa de Desarrollo Regional Turístico Sustentable y Pueblos Mágicos)

PROFEPA Federal Attorney for Environmental Protection (Procuraduría Federal de Protección al Ambiente)

PROMAC Creole Maize Conservation Program (Programa de Conservación del Maíz Criollo) PROMANP Natural Protected Areas Management Program (Programas de Manejo de Áreas

Naturales Protegidas) PROMARNAT Environment and Natural Resources Sectorial Program (Programa Sectorial de

Medio Ambiente y Recursos Naturales) PROMOBI Biological Monitoring in Natural Protected Areas Program (Programa de Monitoreo

Biológico en Áreas Naturales Protegidas)

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PRONAFOR National Forestry Program (Programa Nacional Forestal) PRONASE National Program for the Sustainable Use of Energy (Programa Nacional para el

Aprovechamiento Sustentable de la Energía) PROTRAM Massive Transportation Federal Program (Programa Federal de Apoyo al

Transporte Masivo) PROVICOM Community Surveillance Program in Natural Protected Areas and Areas of

Influence (Programa de Vigilancia Comunitaria en Áreas Naturales Protegidas y Zonas de Influencia)

RABT Agricultural Irrigation in Low Voltage (Riego Agrícola en Baja Tensión) RAMT Agricultural Irrigation in Medium Voltage (Riego Agrícola en Media Tensión) REDD Reducing Emissions from Deforestation and Forest Degradation REIA Environmental Assesment Regulation (Reglamento de Impacto Ambiental) RENCID Technological Platform of the National Registry of International Cooperation for

Development (Plataforma Tecnológica del Registro Nacional de Cooperación Internacional para el Desarrollo)

RENE National Registry of Emissions (Registro Nacional de Emisiones) SAGARPA Ministry of Agriculture, Livestock, Rural Development, Fisheries and Food

(Secretaría de Agricultura, Ganadería, Desarrollo Rural, Pesca y Alimentación) SAT Tax Administration Service (Servicio de Administración Tributaria) SCEFORMEX National Forest Certification System (Sistema Nacional de Certificación Forestal) SCT Ministry of Communications and Transportation (Secretaría de Comunicaciones y

Transportes) SDG Sustainable development goals SE Ministry of Economy (Secretaría de Economía) SECTUR Ministry of Tourism (Secretaría de Turismo) SEDATU Ministry of Agrarian, Land and Urban Development (Secretaría de Desarrollo

Agrario, Territorial y Urbano) SEDESOL Ministry of Social Development (Secretaría de Desarrollo Social) SEEA System of Environmental-Economic Accounting SEMAR Ministry of the Navy (Secretaría de Marina) SEMARNAT Ministry of Environment and Natural Resources (Secretaría de Medio Ambiente y

Recursos Naturales) SENER Ministry of Energy (Secretaría de Energía) SHCP Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público) SIA Social Impact Assessment SIAT Information System of the Transversality Agenda (Sistema de Información de la

Agenda de Transversalidad) SICC Climate Change Information System (Sistema de Información sobre Cambio

Climático) SIE Energy Information System (Sistema de Información Energética) SIMEPRODE Integral System for Ecological Management and Waste Processing (Sistema

Integral para el Manejo Ecológico y Procesamiento de Desechos) SINACC Climate Change National System (Sistema Nacional de Cambio Climático)

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SNIA National System of Environmental Indicators (Sistema Nacional de Indicadores Ambientales)

SNIARN National System of Environmental Information and Natural Resources (Sistema Nacional de Información Ambiental y de Recursos Naturales)

SRE Ministry of Foreign Affairs (Secretaría de Relaciones Exteriores) SUMA System of Management Units for the Conservation of Wildlife (Sistema de

Unidades de Manejo para la Conservación de la Vida Silvestre) TEEB The Economics of Ecosystems and Biodiversity TNC The Nature Conservancy TPP Trans-Pacific Economic Cooperation Agreement UMA Management Units for Wildlife Conservation (Unidades de Manejo para la

Conservación de la Vida Silvestre) UN United Nations UNDP United Nations Development Program UNEP United Nations Environment Programme (now UN Environment) UNFCCC United Nations Framework Convention on Climate Change UNSD United Nations Statistics Division UNWTO UN World Tourism Organization USA United States of America USD United States dollar Vaquita CPR Vaquita Conservation, Protection and Recovery Program (Programa para la

Conservación, Protección y Recuperación de la Vaquita Marina) VAT Value added tax WB World Bank WWF World Wildlife Fund for Nature ZCE Emissions Control Area (Zona de Control de Emisiones)

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Introduction

Mexico, as a member of the OECD, has promoted international and national dialogue of environmental issues, which endorses its commitment to move forward regarding these concerns. The country has been subject to three Environmental Performance Evaluations (EDA), carried out in 1997, 2003 and in 2013. This has reiterated its commitment to implement the recommendations derived from these evaluations.

The main objective of the OECD program on EDAs is to help members, as well as some partner countries, to improve their individual and collective performance in environmental management, by means of the following actions:

• assist individual governments with the evaluation of their progress in achieving their environmental objectives;

• promote dialogue and continuous learning about policy implementation; and • stimulate more accountability between countries in the light of public opinion.

The EDA 2013 recognised the progress that was achieved from 2003 to 2013 in terms of environmental management, green growth, climate change and sustainable use and conservation of natural resources; it also identified the challenges that need to be faced to achieve a policy that promotes the sustainable development of our country. From this evaluation 29 recommendations arose, covering four major issues: the framework of policy making, towards green growth, climate change and forests and biodiversity.

This mid-term report is presented with the objective of showing the general progress in the implementation of the recommendations derived from the EDA 2013. The first section presents the main achievements made on selected recommendations corresponding to each of the four major topics covered by the Evaluation. This exercise includes a brief description of those recommendations that registered a substantial progress in their implementation, as well as those that continue in the process of development, identifying the factors that have not facilitated their implementation. In the second section, relevant national indicators that contextualise the environmental performance of our country in social, economic and environmental terms are included. In the third section, a detailed description of the actions undertaken to implement each of the 29 recommendations derived from the EDA 2013 is included.

Our country's unwavering commitment to sustainable development underscores the importance of continuing to advance in the design and formulation of environmental policies that respond more effectively to the environmental challenges we face today. The alliance between Mexico and the OECD is and will continue to be fundamental for the consolidation of our national environmental policy.

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Progress in recommendations

1. Policy making framework

Box 1.1. Policy making framework: Recommendation 1

More clearly distinguish the policy development and regulatory functions of SEMARNAT for natural resource and ecosystem management (coastal zone management, forests and biodiversity – including marine and freshwater ecosystems) from the policy implementation functions of its deconcentrated agencies (such as issuing permits, processing EIA applications and enforcing compliance with legislation).

1.1. Strengthening of environmental planning, regulation and management

The 2013-18 National Development Plan emphasised the link between the economic development of the country and the sustainable use of natural resources under efficient use of natural capital a scheme. This is stated in the Objective 4.4 was derived from these premises, in order to promote and guide an inclusive and enabling green growth that preserves our natural heritage, while generating wealth, competitiveness and employment (PND, 2013).

The 2013-18 Sectorial Program for Environment and Natural Resources identifies, characterises and translates the major issues of environmental policy into six objectives, each with its corresponding strategies and lines of action. It is important to mention that this is the first Sectorial Program that incorporates strategic quantitative indicators to monitor the goals of the environmental policy.

The distribution of functions within SEMARNAT in the areas of formulation, regulation and implementation of environmental policy has responded is the product of organic growth of the sector rather than design. However, significant efforts have been made in recent years to outline more clearly the functions of the Ministry as head of the sector and of its decentralised bodies and semi-independent bodies as entities tasked with applying the corresponding regulations. Proof of the above is the reform that was made to the Internal Regulations of the Ministry and now is pending for approval, through which the governance of the institution was reformulated in order to provide greater clarity among institutions.

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In terms of the legislation, a legal framework was developed, and several laws were issued 2012-17 period. These laws contributed to the definition of responsibilities in the environmental sector. The issuance of the General Law on Climate Change (LGCC) stands out in this area. Giving rise to different planning instruments and programs, such as the National Strategy on Climate Change, Vision 10-20-40 (ENACC 2013), which describes the strategic objectives and action lines to guide the policies of the three levels of government and encourage co-responsibility with various parties of the society. It also gave rise to the Special Climate Change Program (PECC) which was developed by SEMARNAT, with the participation and approval of the Intersecretarial Commission on Climate Change (CICC). In this program the objectives, strategies, actions and goals to face climate change were established by defining priorities in terms of adaptation, mitigation, research, as well as the allocation of responsibilities, execution times, action co-ordination and the estimation of costs and results, according to the ENACC.

The institutional co-ordination for Climate Change policy was formalised with the creation of the General Directorate of Climate Change Policies within the Undersecretary of Planning and Environmental Policy, which is responsible for formulating and promoting national policies and strategies on mitigation and adaptation to climate change. Likewise, the LGCC transformed the National Institute of Ecology into the National Institute of Ecology and Climate Change (INECC), expanding its responsibilities to assist in the implementation of the national climate policy, issuing recommendations on mitigation and adaptation policies and actions, as well as assessing climate policies in the three levels of government.

The Federal Law of Environmental Responsibility (LFRA 2013) was also issued, in response to the needs of a legal instrument that would assure the right to a healthy environment, establishing a new type of responsibility ("Environmental Responsibility") that arises from the damage caused to the environment. Likewise, the LFRA included the figure of -repairing the damage caused- or the -payment of sanctions for environmental compensation-, stating that "any physical or moral person that directly or indirectly causes damage to the environment will be obliged to repair it, or when the repair is not possible, by exception, an environmental compensation will be carried out". From the institutional point of view, the publication of this Law represents an extension of the functions of the Federal Attorney for Environmental Protection (PROFEPA) as an entity allowed to enforce environmental responsibility, the reparation and compensation of the damages caused to the environment and the payment of economic sanctions. This contributes directly to the progress in environmental justice,

In 2013 the Energy Reform was approved and is looking forward to transform the national energy sector into an engine of economic growth to promote investment, technological development and the conformation of value chains. As a result of this reform, in 2014 the National Agency for Industrial Safety and Environmental Protection of the Hydrocarbons Sector (also known as the Safety, Energy and Environment Agency: ASEA) was created. ASEA is a multidisciplinary regulatory figure whose mission is to supervise industrial safety and environmental protection along the hydrocarbon value chain. Although the Ministry of Energy continues to be the main actor in the definition of energy policy, it is also true that the functions of SEMARNAT have increased in the area of hydrocarbons, which is why co-ordination between both institutions is fundamental. Therefore, to facilitate the inter-institutional dialogue, the Coordination Council of the Energy Sector was established in 2016. Finally, with regard to the distribution of activities, the creation of the ASEA meant an expansion in the inspection tasks that, until then, PROFEPA carried out, which limited its coverage.

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In terms of air quality, it was determined that efforts cannot be isolated because air pollution does not recognise political borders. Following this reasoning, six entities in central México (Mexico State, Hidalgo, Morelos, Puebla, Tlaxcala and Mexico City) were included in the Air Quality Strategy to implement a regional air quality policy. The co-ordination between different levels of government was institutionalised with the creation of the Megalopolis Environmental Commission (CAME, abbreviation in Spanish) in 2013.

The need to have a specialised body for the care and prevention of environmental crimes arises from a diagnosis done on the issues regarding Natural Protected Areas (NPA) made by the Natural Protected Areas National Commission (CONANP) and PROFEPA. In 2016, as a result of the collaboration between SEMARNAT and the National Security Commission, an agreement was signed for the creation of the Environmental Mission Gendarmerie (Gendarmeria Ambiental) whose objective is to prevent crimes and administrative failures in environmental matters, as well as to safeguard peace and security of the NPA in federal jurisdiction. This Division falls within the structure of the Federal Police and has power in matters of security and law enforcement. Up until 2017 the Mission of the Environmental Gendarmerie had just over 1 000 trained elements in environmental legislation which are deployed in 16 NPA (out of 67 of priority areas). Among its most important achievements are the recovery of 26 ha from northwest of the Sumidero Canyon National Park, 7 decommissioned sawmills and 4 dismantled sawmills in the Ajusco.

Regarding to the functions of the semi-independent agencies and decentralised bodies of SEMARNAT, a reform of the environmental regulatory framework is being sought, to provide them with greater operational faculties. Such is the case of the Ley General de Gestión Forestal Sustentable (General Law on Sustainable Forest Management) that gives the National Forestry Commission (CONAFOR) greater responsibilities in terms of notices and consents of commercial forest plantations and use of genetic resources, among others. The Ley General de Biodiversidad (General Law on Biodiversity) project seeks to integrate the provisions on this subject in a single order with a cross sectional character, and points out the concurrence between the three levels of government, in order to expedite the institutional action on the matter. It would also be the conduit through which the provisions of the Nagoya Protocol would be incorporated into Mexican legislation, updating the regulatory framework on biodiversity.

In 2015 the updating of the Política Nacional de Mares y Costas de México (National Policy of Oceans and Coasts of Mexico) was carried out, and is under review by the Comisión Intersecretarial para el Manejo Sustentable de Mares y Costas (Intersecretarial Commission for the Sustainable Management of Oceans and Coasts, CIMARES). This update was in response to the urgent need to have a comprehensive management tool that strengthens, guides and supports the planning and organisation of these regions. It is also a necessary an action guide that articulates the responsibilities of the multiple actors involved in coastal management.

Regarding the issue of Environmental Impact Assessments (EIA), making the process more transparent by updating technical guidelines for the EIA has been sought, by updating technical guidelines for the EIA (2014). This makes the evaluation process transparent, as it includes new technical requirements, the periods of the different parts of the evaluation procedure and, in general, describes the expected quality of environmental impact studies (MIA, for its acronym in Spanish).

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The EIA management process has been made more transparent and efficient through the creation of various systems. The first is the Procedures Consultation System, which allows monitoring of the status of each procedure that has entered the environmental impact assessment process. The second is the Geographic Information System for the EIA, which allows public access to information on environmental planning tools, applicable to the geographical area occupied by the projects or works. The third is the System for the Entry, Evaluation and Resolution of Manifestations of Environmental Impact and Procedures derived in electronic form (MIA-E) that allows monitoring of the online process (status and level of progress). It is important to mention that said System publishes the final results so that the general public can consult them. The fifth is the ISO-9001certification of EIA procedures, which is renewed every two years; the last renovation was this year 2017.

More information:

www.pnd.gob.mx

www.semarnat.gob.mx/archivosanteriores/Documents/PROMARNAT%202013-2018.pdf

www.diputados.gob.mx/LeyesBiblio/pdf/LGCC_010616.pdf

www.oecd.org/gov/regulatory-policy/Mexico-Energy-brochure-ESP.pdf

www.gob.mx/asea/articulos/como-nace-asea?idiom=es

www.gob.mx/policiafederal/articulos/gendarmeria-mision-ambiental

www.biodiversidad.gob.mx/pais/mares/pdf/A4_PNMC_actualizada_dic2015.pdf

www.gob.mx/semarnat/documentos/tramite-semarnat-04-002-a h

www.gob.mx/semar/prensa/el-secretario-de-marina-recibe-la-presidencia-de-la-comision-intersecretarial-para-el-manejo-sustentable-de-mares-y-costas-cimares

http://reformas.gob.mx/reforma-energetica/que-es

www.diputados.gob.mx/LeyesBiblio/pdf/LFRA.pdf

www.diputados.gob.mx/LeyesBiblio/pdf/259_240117.pdf

http://ceiba.org.mx/publicaciones/Leyes&Normas/Inic_PVEM_Ninfa_LGBio.pdf

www.gob.mx/comisionambiental

www.gob.mx/inecc

www.semarnat.gob.mx/sites/default/files/documentos/transparencia/programa_especial_de_cambio_climatico_2014-2018.pdf

www.semarnat.gob.mx/archivosanteriores/informacionambiental/Documents/06_otras/ENCC.pdf

www.diputados.gob.mx/LeyesBiblio/ref/lgcc.htm

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Box 1.2. Policy making framework: Recommendation 2

Further strengthen environmental policy integration by: i) introducing strategic environmental assessment for sector programs and state and municipal development plans; ii) incorporating environmental criteria in the evaluation of public policies by the National Evaluation Commission; iii) inviting other sector ministries to provide input to the formulation of federal environment programs; and iv) pursuing environmental policy integration in state development plans.

1.2. National framework on evaluation

The evolution of the regulation and institutional framework in terms of policy evaluation in Mexico emerge due to the need to generate high quality and reliable information on social development policy, within a framework of transparency and information access. With the creation of the Consejo Nacional para la Evaluación de la Política Social en México (National Council for Social Policy Evaluation, or CONEVAL for its acronym in Spanish) Mexico commitments to provide valuable inputs to the design of better social public policies and programs.

CONEVAL, as the body that regulates and co-ordinates the evaluation of social policy, has placed emphasis on environmental issues. Focusing on the issue of climate change, it has made clear that the environmental variable is transversal to the planning of social policies in all sectors. The LGCC give policy evaluation functions to INECC that is in charge of evaluating climate change public policies. SEMARNAT, CONEVAL and INECC worked together in the first evaluation that established a starting point for the development of methodologies, indicators, and an evaluation agenda with environmental criteria. Although there have been progresses in the matter, a greater effort is expected for the inclusion of the environmental criteria in the policy evaluations of other sectors.

1.3. Evaluation of programs in the environmental sector

Since 2008, CONEVAL has carried out various evaluations of environmental sector programs under the modalities of specific performance, design, process, consistency and results evaluations. The first strategic evaluation of an environmental sector program was done in 2016 when the Programa Sectorial de Medio Ambiente y Recursos Naturales (Sectorial Program of Environment and Natural Resources, or PROMARNAT for its acronym in Spanish) 2013-18 was evaluated.

The evaluation of PROMARNAT 2013-2018 focused on four major themes: i) the consistency of the program, that is, the relevance linking the diagnosis, the objectives, and its orientation to results; ii) coherence in alignment, which refers to the link between SEMARNAT's government interventions and the achievement of objectives; iii) the relevance of the implementation of the sectorial policy through budgetary programs; iv) the measurement of progress and performance of the Program.

One of the main findings was that the program adequately defines and diagnoses of the country's major environmental problems, but does not adequately identify and quantify the problems associated with agricultural subsidies, unsustainable urban development,

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unsustainable tourism and the environmental effects of activities such as mining. It was also found that an adequate mainstreaming of the gender perspective was achieved.

Based on these findings, it was concluded that it is necessary for sectoral planning to consider the participation of other sectors that have direct impacts on environmental issues, in order to make an alignment of national policies.

1.4. Comprehensive performance assessment of federal programs linked to conservation and protection of the environment 2014-16.

This evaluation was carried out in order to assess the performance of ten environmental programs (Table 1.1). Among the identified strengths it is noted that the recommendations derived from other assessments have been met, which resulted in the constant updating of their guidelines or operation rules. The information has been systematised and a clear and precise record of assistance, supervision and granting of subsidies is kept. It is worth mentioning that in 2016, due to budget reductions, the SHCP reorganised the public expenditure of programs. Many, with similar objectives or goals were combined into single programs.

Table 1.1. Conservation and protection of natural Resources SEMARNAT’s federal programs 2014-16

Program Modality 2014

Name Modality 2016

U035 Management of Protected Natural Areas Programs (PROMANP)

U035 PROMANP

U034 Biological Monitoring in Natural Protected Areas Program (PROMOBI)

U035 PROMANP

U024 Community Surveillance Program in Natural Protected Areas and Regions of Influence (PROVICOM)

U035 PROMANP

S219 National Forestry Program Payment for Environmental Services (PRONAFOR-PSA)

S219 Assistance for sustainable forestry development

U009 Action Program for the Conservation of the Vaquita Marina (PACE: Vaquita)

U025 Program for the Recovery and Repopulation of Species at Risk

U029 Native Corn Conservation Program (PROMAC) U025 Program for the Recovery and Repopulation of Species at Risk

U025 Recovery and Repopulation of Species in Danger of Extinction Program (PROCER)

U025 Program for the Recovery and Repopulation of Species at Risk

S046 Conservation Program for Sustainable Development (PROCODES)

No substantial changes

U012 Prevention and Integral Waste Management No substantial changes U020 Promotion for the Conservation and Sustainable Use of

Wildlife No substantial changes

Source: Elaboration with information from CONEVAL (2016).

In terms of coverage, these programs have attempted to improve targeting despite budget cuts, this has led to, for example, the reintroduction of some species into their habitat or the timely identification of species at risk such as the condor of Baja California, the golden eagle, the Mexican wolf, among others. However, as a result of budget reduction, there are environmental problems that were left unattended, so reviewing the consequences of these cuts are necessary.

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Regarding the challenges identified, there is a need for environmental policy to be transversal, and the execution of the programs makes sense insofar as there is co-ordination and alignment of policies, programs and actions, because the above help on the prevention of environmental degradation.

1.5. Greater presence of environmental issues in the national evaluation policy agenda.

The type of assessments, (a total of 135) were framed in the Annual Evaluation Program between 2013 and 2017: the design evaluation, the performance assessments, the consistency and results assessment, the processes evaluation, and monitoring results cards, and complimentary evaluations. The follow-up to these assessments was done with compliance to the recommendations derived from them, resulting in the definition of 229 Aspectos Susceptibles de Mejora (Susceptible Aspects of Improvement, or ASM for its acronym in Spanish) between 2013 and 2017. So it is expected that the programs has integrate the recommendations so far.

1.6. Impact evaluation of the payment for Environmental Services Sustainable Forest Development Program (S219).

This evaluation was carried out between 2016 and 2017, with the technical support of the World Bank (WB), and under the supervision of CONEVAL and CONAFOR. It had the objective of determining the effects of assistance granted between 2010 and 2014 on avoided deforestation, social organisation and socio-economic variables, as well as on expanding the knowledge of the program for decision making. This evaluation is the first of its kind to be carried out in environmental matters and sets an important precedent for defining the criteria of the evaluation agenda for the coming years. The results are expected to be announced by the end of 2017.

1.7. Climate change assessment

Another form of strengthening the culture of evaluation in our country was through the inclusion of a specific mandate in the LGCC. Thus, the creation of an entity with the aim to evaluate climate change policies and propose modification, addition or reorientation (partial or total) was foreseen. The Assessment Coordination was created at INECC and six social counsellors participate in the group of evaluators.

In September 2017, this co-ordination published the results of the Strategic Evaluation of the Transversal Annex of the Budget of Expenditures of the Federation in Climate Change as well as the results of the PECC 2014-18.

The main findings included the identification of significant progress, as well as challenges, in terms of design and processes for their implementation. The need for monitoring, reporting and verification (MRV) mechanisms to provide greater traceability of the actions carried out within the framework of the PECC was emphasised, along with the necessity of a correct definition and traceability of the public budget for the implementation of climate policy.

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1.8. Inter-secretarial co-ordination.

The national planning process is carried out in sectors in accordance to the provisions of the national legislation. However, there is a clear need to consider other sectors when formulating environmental programs in order to avoid duplication of actions, or to prevent the programs of other sectors from being in conflict with the objectives of conservation or sustainable use of natural resources. Likewise, intersectoral co-ordination favours the creation of synergies between programs and the achievement of greater results, making the use of public resources more efficient.

As a result of structural reforms and institutional changes that were achieved as of 2012, there was a growing need to finalise intersectoral co-ordination agreements. In this context, agreements were reached to address various issues such as urban territorial development, expansion of the agricultural frontier, development of the hydrocarbon sector, sustainable tourism and air quality, among others.

1.9. Strengthening the environmental policy evaluation agenda

The culmination of the legislative process will constitute the CONEVAL as an Autonomous Constitutional body and will redefine its faculties and scope is pending.

It is essential to update the "Ley de Planeación" (Planning Law), which will be a decisive factor when defining terms of the national evaluation policy.

Within the framework of national and international commitments derived from the adoption of the 2030 Agenda and the Sustainable Development Goals, evaluation will be a central aspect for its proper execution. In this regard, it is expected that the development of the National Strategy for the implementation of the 2030 Agenda in Mexico will catalysed the efforts to strengthen the evaluation agenda and promote the inclusion of environmental criteria in a transversal manner.

More information:

www.coneval.org.mx/Informes/Normateca/PAE_2015.pdf

www.gob.mx/inecc/documentos/informes-de-los-resultados-de-la-evaluacion-estrategica-del-anexo-transversal-y-del-programa-especial-de-cambio-climatico

www.sagarpa.gob.mx/Delegaciones/jalisco/boletines/Paginas/2016B12002.aspx

Box 1.3. Policy making framework: Recommendation 3

Strengthen public participation in environmental policy making by: i) extending the public participation strategy from the federal to other levels of government; ii) providing environmental information to the public in a way that can be better understood; iii) rationalising the system of consultative councils and providing them with sufficient resources to fulfil their role; and iv) providing appropriate responses to citizens’ enquiries

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1.10. More robust international, national and institutional legal frameworks in terms of access to public information

The 6th Article of the Constitution, which refers to information access, has been amended several times between 2013 and 2016. It currently establishes that free access to plural and timely information is part of the individual guarantees of all persons, preserving at all times the principle of maximum publicity.

The Program for a Close and Modern Government was formulated and implemented by the Ministry of Public Administration in order to implement the vision of the Federal Government in terms of transparency, access to information and public accountability. Within the framework of this Program, the Citizen Participation Policy for Government Decision Making was created. It promotes the improvement of institutional performance and the quality of the services that are granted to citizens. Along the same lines, in 2013 Mexico joined the Alliance for the Open Government international initiative that promotes a new government approach, based on the principles of transparency, citizen participation and accountability. This Alliance constitutes a space for dialogue between government and civil society within the framework. In this context, commitments that seek to transform the quality of life of people have been made.

In support of Mexico's commitment to the 2030 Agenda and the Sustainable Development Goals, actions have been established that will contribute to the achievement of SDG 16, in terms of the creation of effective, responsible and transparent institutions at all levels that guarantee adoption of inclusive, participatory and representative decisions that respond to the needs of society at all levels.

1.11. Strengthening of the environmental governance

The environmental sector, as pioneer in the institutionalisation of citizen participation, has adopted pertinent measures derived from this regulatory framework to expand the agenda of public participation in environmental policy; proof of this is the inclusion of citizen participation in PROMARNAT, as an objective from which different strategies and lines of action are derived, and the addition of a quantitative indicator of the Citizen Participation Index in the environmental sector.

This index quantifies and weighs the tasks of citizen participation and services in the different institutional instruments and mechanisms. Its general objective is "to have the benchmark that supports the strengthening of citizen participation mechanisms and instruments established in the Environment and Natural Resources Sector" and consists of two categories: Participación Ciudadana (Citizen Participation, or PC for its acronym in Spanish) and Atención Ciudadana (Citizen Services, or AC for its acronym in Spanish).Table 1.2 shows the evolution of this index, which reveals that PC has increased compared to 2013 and CA has remained stable up to 2016.

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Table 1.2. Index of Citizen Participation in the environmental sector 2013-17

Category 2013 2014 2015 2016 Citizen Participation 0.6 1.027 0.83 0.84 Citizen Services 0.4 0.451 0.46 0.46 Total 1 1.478 1.29 1.3

Source: National System of Environmental Information and Natural Resources SEMARNAT.

The PC in environmental management continues in the process of being consolidated since the creation of the first generation of the Advisory Councils for Sustainable Development (CCDS) in 1995. However, social and environmental dynamics have also underlined the need to update these mechanisms in order to comply with the social function which they were conceived.

Participatory Environmental Monitoring Committees. Between 2013 and 2016 more than 2 000 Committees at a national level have been integrated, surpassing the sexennial goal that was originally set (1 800 committees), by means of which the owners of natural resources as well as the civil society in general are involved in conservation of natural resources and ecosystems. The Committees are accredited and trained by PROFEPA to perform surveillance and prevention functions as well filling of reports before the corresponding authorities. They have helped safeguard the habitat of some species such as the iconic Monarch Butterfly, as well as the prevention of environmental crimes. This strategy has led to the expansion of national territory under at least some type of surveillance, as well as a source of income for the members of these Committees, who have received the payment of wages through the Programa de Empleo Temporal (Temporal Employment Program, or PET for its acronym in Spanish).

The Agreement with which the National Advisory Council for the Environmental Sector is at its approval phase. This Council would incorporate the active participation of indigenous peoples through the creation of the Consultative Council of the Commission for the Development of Indigenous Peoples.

1.12. Mechanisms of social participation and gender equality

Gender equality and environmental sustainability. The inclusion of women in sustainable development strategies is a fundamental element to progress in the attainment of national and international objectives in this sector. In order to guarantee the access, use and conservation of natural resources by women, especially in the rural sector and of the indigenous peoples, their participation is encouraged through the allocation of resources destined to the development of local production projects. These resources contribute to the empowerment of women in situations of high and very high marginalisation by strengthening their technical, organisational and management capacities. Aiming to reduce the existing gender gap in the environmental sector.

1.13. Environmental information

The PROMARNAT 2013-18, has an environmental governance section that states (Objective 6), that timely access to sufficient and high quality environmental information should be promoted and facilitated, making use of modern information and communication technologies.

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In this context, one of the main actions has been the expansion of the Sistema Nacional de Información Ambiental y de Recursos Naturales (National System of Environmental Information and Natural Resources, or SNIARN for its acronym in Spanish) between 2013 and 2017 which currently has an improved and increased amount of statistical and geographical information, and has also diversified its dissemination products. As part of this expansion, a set of constantly updated green growth indicators has been developed within the Sistema Nacional de Indicadores Ambientales (National System of Environmental Indicators, or SNIA for its acronym in Spanish), which will allow us to follow the development of Mexico in its transition towards a greener economy.

Likewise, knowing that environmental education is fundamental for the formation of a co-responsible and participatory society, actions seeking that educational institutions be the channel through which well qualified professional are formed with the necessary and sufficient skills to face the challenges that sustainable development brings, have been carried out.

More information:

www.diputados.gob.mx/LeyesBiblio/pdf/1_150917.pdf www.gob.mx/sfp/acciones-y-programas/programa-para-un-gobierno-cercano-y-moderno-pgcm www.gob.mx/sfp/acciones-y-programas/politica-de-participacion-ciudadana-para-la-toma-de-decisiones-gubernamentales http://pa2015.mx/ www.profepa.gob.mx/innovaportal/v/1555/1/mx/comites_de_vigilancia_ambiental_participativa_en_materia_forestal.html http://dgeiawf.semarnat.gob.mx:8080/ibi_apps/WFServlet?IBIF_ex=D4_R_PROFEPA01_05&IBIC_user=dgeia_mce&IBIC_pass=dgeia_mce www.mx.undp.org/content/mexico/es/home/operations/projects/environment_and_energy/fortalecimiento-de-la-participacion-ciudadana-y-gobernanza-ambie.html www.semarnat.gob.mx/sites/default/files/documentos/transparencia/pat_2017.pdf www.semarnat.gob.mx/sites/default/files/documentos/transparencia/IPC/IPC_Informe_2016.pdf www.semarnat.gob.mx/temas/estadisticas-ambientales

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2. Towards a green growth

Box 2.1. Towards a green growth: Recommendation 1

Gradually replace the diesel and petrol price-smoothing mechanism with an excise tax on transport fuels; introduce excise duties on other energy products; differentiate the excise tax rates to reflect the environmental externalities associated with the use of these products, including their contributions to greenhouse gas (GHG) emissions and local air pollution; where needed, provide social transfers for those adversely affected by increased energy prices.

2.1. Gradual phase out of gasoline and diesel implicit subsidy

In Mexico, gasoline and diesel prices were not determined under the supply and demand interactions as they would under a market structure; The Federal Government was responsible for setting the prices through the Secretaría de Hacienda y Crédito Público (Ministry of Finance and Public Credit, or SHCP for its acronym in Spanish with a Committee of Petroleum Products, Natural gas and Petrochemical Products, composed of the Secretaría de Economía (Ministry of Economy, or SE), Secretaría de Energía (Ministry of Energy, or SENER), Petróleos Mexicanos (PEMEX) with its subsidiary bodies as members, and the Comisión Reguladora de Energía (Energy Regulatory Commission, or CRE) as an advisor.

Regarding price policy for gasoline in Mexico; a first period of implicit taxes was observed between 1995 and 2004, and a second period from 2005 to 2011 as shown in the following figure.

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Figure 2.1. Evolution of gasoline prices

Source: Elaboration with data from the Sistema de Información Energética (Energy Information System, or SIE) and the Bureau of Labor Statistics of the USA.

In 2012, the government decide to phase out gradually the subsidies for gasoline, diesel, and liquefied petroleum gas (LPG). From that year on, Mexico maintained the policy of smoothing the increases in prices of these fuels. The objective is to eventually reach international prices through a gradual reduction of net subsidies. As a result, by 2013 fuel subsidies had fallen in real terms to their lowest levels in a decade, and in 2014, Mexico was able to cross the threshold to positive taxes. In 2015, these prices were transformed into maximum prices, preparing for the opening of imports of private fuels and the possibility of new participants offering fuel below this price (G20, 2017).

In 2016, it was established that the maximum prices should follow a predetermined formula, so that changes in international references could be traced, within a band of +/- 3% of the price of December 2015. The use of this formula allowed the partial transmission of the changes in reference prices in 2016 to consumers (G20, 2017).

In October 2016, the Mexican Congress passed legislation (to start in 2017) for the further increase of flexibility in gasoline and diesel markets. The CRE met the required conditions to allow the prices of gasoline and diesel to be established by the market. In December 2016, a calendar for the gradual liberalisation of prices throughout the country was published, with the last regions scheduled to be liberalised in December 2017. All the fossil fuel will be subject to Value Added Tax (VAT), and in the case of gasoline and diesel will be subject to the IEPS and to the carbon tax. In general, this reform has been substantial, generating benefits for Mexico's budget and for the environment (G20, 2017).

At the end of 2017 all the fuel prices are determined under market conditions. Figure 2 shows the evolution of subsidies on gasoline and diesel. Figure 3 shows the amounts in subsidies in both fuels as a percentage of GDP.

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Figure 2.2. Subsidies on to gasoline and diesel (millions of USD)

Source: Elaboration with G20 data (2017).

Figure 2.3. Taxes or subsidies on gasoline and diesel as a percentage of GDP

Source: Elaboration with G20 data (2017).

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2.2. Excise taxes on energy products

In 2014, excise taxes on the consumption of fossil fuels were implemented, which levies its carbon content and is considered a carbon tax. This tax is a new policy instrument; however, its rates are still substantially lower than those originally proposed in 2013; this situation presents an opportunity to review it.

The following figure shows the evolution in the collection of IEPS for transportation fuel: gasoline and diesel.

Figure 2.4. Collection of IEPS for transportation fuels

Source: Elaboration with data from SHCP (2017).

Tax rates are reflected in the IEPS in the climate change section. The following chart shows the collection rates for fuel types published in the Official Gazette of the Federation 2016, applicable during 2017.

The figure shows that high emission levels correspond with high IEPS rates. Likewise, less polluting fuels are taxed in lesser amounts. These relationships reflect the environmental externalities associated with the use of these products; the dotted line represents the simple correlation between the tax rate and the emission factor for these six fuels.

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Figure 2.5. Relationship between the tax rates of the carbon IEPS and emission factor

Source: Elaboration with data from DOF, (2017), INECC & IMP, (2014).

More information:

www.oecd.org/site/tadffss/Reporte%20IFFS%20Versi%C3%B3n%20Final.pdf

www.oecd.org/eco/surveys/economic-survey-mexico.htm

www.oecd.org/site/tadffss/Mexico-Peer-Review.pdf

http://apps1.semarnat.gob.mx/dgeia/indicadores_verdes17/indicadores/04_innovacion/4.1.1.html

www.mexico2.com.mx/uploadsmexico/file/artimpuestofinal.pdf

INECC & IMP. (2014). Informe técnico de los factores de emisión para los diferentes tipos de combustibles fósiles y alternativos que se consumen en México. Revised at www.gob.mx/cms/uploads/attachment/file/110131/CGCCDBC_2014_FE_tipos_combustibles_fosiles.pdf

www.ordenjuridico.gob.mx/leyes.php

www.shcp.gob.mx/EGRESOS/contabilidad_gubernamental/Ejecucion/2_ie_2014_CONSOLIDADO.pdf

www.shcp.gob.mx/EGRESOS/contabilidad_gubernamental/Ejecucion/2_ie_2014_CONSOLIDADO.pdf

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Box 2.2. Towards a green growth: Recommendation 2

Restructure vehicle taxes to take account of vehicles’ environmental performance, including emissions of GHGs and local air pollutants; ensure that the vehicle ownership tax is applied in all states; reduce perverse incentives for vehicle use by removing tax credits for fuel use and road tolls, and by reforming the tax treatment of company cars and parking spaces.

2.3. Taxes on new cars (ISAN)

In Mexico, producers that sell or import new cars are charged with the Impuesto sobre Automóviles Nuevos (new vehicles tax, or ISAN) in accordance with to the following scheme:

Table 2.1. Fees applied to ISAN according to different price ranges

Lower limit (USD) Upper limit (USD) Fixed fee (USD) % applicable on the surplus of the lower limit

0 12 644 - 2 12 644 15 172 253 5 4 911 17 701 379 10

17 701 22 759 632 15 22 759 from this point forward 1 391 17

Source: DOF (2016).

Due to the tariff being tied to the price of the car, it does not necessarily comply with an environmental criterion. A green tax would be one that taxes cars that generate the greatest amount of GHG emissions with a higher rate. In this sense, it is possible that new owners of cars with high fuel efficiency pay a high tax due to the price of the car. Also, new owners of cars that generate high emissions could pay a moderate tax. This generates an inefficient scheme as the tax does not reflect the environmental cost to society in terms of GHG. To drive the country towards green growth it is necessary to restructure the ISAN tax and establish the appropriate economic incentives in such a way that the rate is linked to the amount of emissions per vehicle and not the price.

Although ISAN is based on price, it is not applied to all automobiles. Electric and hybrid cars do not pay the tax. In these cases, the absence of ISAN tax reflects good environmental performance. So the progress on this recommendation only reflects in the higher environmental performance it is needed to develop to other levels of performance.

2.4. Tax on vehicle ownership

Vehicle ownership is a tax whose target is the population of people registered as motor vehicle owners. This tax does not have a national scope, as each federal entity can define its application.

The following map shows the federal states that charge vehicle holding tax with some type of discount to the rate (darker colour), the states that charge it yet grant partial subsidies (moderately dark colour), and the states that do not apply charges (light colour),

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in 2017. A green tax on vehicle ownership would generate changes in consumer preferences that would be reflected in the automotive market. It is still necessary to define which are the variables that permeate the decisions of consumers when choosing a vehicle. For example; power, speed, safety, efficiency, or others (Centro Mario Molina, 2012).

However, there was a setback in this policy due to the fact that the local governments decided to remove the tax. The total or partial discount generates a disincentive to change a car for a car with better environmental performance. There is an opportunity to make a positive synergy with policy instruments such as standards and taxes.

Figure 2.6. List of states has a tax on vehicle ownership in Mexico

Source: SAT (2017).

More information:

http://losimpuestos.com.mx/tenencia/

Box 2.3. Towards a green growth: Recommendation 3

Regularly assess the environmental, social and economic impacts of existing and proposed direct and indirect subsidies in an integrated way, with a view to improving transparency and identifying trade-offs and subsidies that could be removed, reduced or redesigned; replace perverse subsidies to energy use, agriculture and fisheries with targeted cash transfers to low-income households and small farmers (e.g. building on the “Oportunidades” programme).

According to the G20 2017 report for Mexico, the tax exemption of diesel and gasoline for fishermen and farmers is regulated by the Ley de Energía para el Campo (Law of

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Energy for the Land). This Law establishes that these two types of agents must be subject to economic incentives for electricity and fuel prices.

The objective of this fiscal benefit is to reduce the costs that these two groups face, such that increases in food prices (associated with the increase in fuel prices) have a moderate negative effect. Only those who register on the SAGARPA program lists can be subject to tax reductions; these reductions depend on the size of the property and the number of equipment, machines, tools, fuel and tractors or vessels used in the economic activity. The lists are open to all fishermen and farmers regardless of the size of their economic activities or heritage.

This tax exemption for fuels has been granted through different fiscal instruments (G20, 2017). Between 2011 and 2017, the Comisión Nacional de Acuacultura y Pesca (National Commission of Aquaculture and Fishery, or CONAPESCA) used a specific budget for the transfer of fixed subsidies per litre of fuel for registered fishermen. Likewise, SAGARPA has granted reduced tax rates to registered farmers on diesel and gasoline prices between 2011-13 and in 2017.

Almendarez et al. (2013) showed that much of the fishing vessels use their maximum quota of subsidised litres of diesel, that is, the quota is lower than the consumption they would have in the absence of subsidies. The authors explain that the subsidy is MXN 2 per litre of fuel and that it is limited to a maximum quota of subsidised litres; the quota is determined considering the maximum litres per day (depending on the power and consumption of the machine), days per cycle (depending on the littoral and the fishery), and an adjustment factor (G20, 2017). If the tax is higher than the fishing catch from a vessel in a scenario with subsidy, then the subsidy would encourage more fishing.

It is important to point out that in the case of agriculture SAGARPA has a fuel efficiency criteria in the rules of operation so this improve the targeting and economic efficiency. In this case the beneficiaries have to declare the model/age of the tractor and the reduction of taxes is restricted to the efficient machines. In the case of fisheries, there is no such as a rule; the recommendation is to improve targeting.

Regarding the rate for agricultural water pumping, Tariff 09, SAGARPA, SHCP, and FIRA are developing pilot projects in which the beneficiaries of this subsidy must renounce their energy quota provided by the subsidy, transferring this subsidy to change to a more efficient irrigation technology.

Box 2.4. Towards a green growth: Recommendation 5

Extend the waste charging system; develop a sound waste management system that includes the participation of workers currently part of the informal waste sector; promote and monitor the performance of public-private partnerships in waste management.

2.5. Waste charging system

In 2013 there were only seven cities that charged for household waste collection in Mexico, among them Aguaprieta, Mérida, Puebla, and Tehuacán. In 2017, at least 20 municipalities charge for the waste collection service.

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One case is that of Cuetzalan del Progreso in Puebla, which is one of the 439 most marginalised municipalities in the country. This municipality established in Article 27 of its Income Law for Fiscal Year 2017 that: "The fees for the services of collection, transportation and final disposal of solid waste will be due and the following fees will be paid:

Table 2.2. Charges for waste collection service in Cuetzalan del Progreso, Puebla

I. Within the urban area Use Description Cost (USD)

a) Per day of collection, for each household:

If the garbage is delivered separately in organic and inorganic. $0.00 If the garbage is delivered without separation $0.21

b) Shops and service providers. If the garbage is already delivered separated in organic and inorganic.

$0.00

If the garbage is delivered without separation. $0.72 c) For industries, the collection will be made through an agreement, which for these purposes will be held by the municipal authority with the user.

II. Per tonne, for use of municipal sanitary landfill facilities for the final disposal of solid waste: USD 7.

Source: Article 27 of the Ley de Ingresos para el Ejercicio Fiscal (Income Law for Fiscal Year) 2017 Cuetzalan del Progreso, Puebla.

According to the Municipal Income Laws of 2017, the following municipalities have a waste charging system. The municipalities of San Pedro Cholula and San Andrés Cholula, in the state of Puebla charge for the service; 13 municipalities charge for the collection of waste in Jalisco: Acatic; Jalostotitlán; Mascota; Mixtlán; Tepatitlán; Casimiro Castillo; Atenguillo; Talpa de Allende; Arandas; San Ignacio Cerro Gordo; San Diego de Alejandría; Cabo Corrientes; and Tapalpa.

It will be important to encourage using this type of economic instruments in the rest of the country. The benefits expected are to improve public finance, or to change citizen behaviour among others. So the examples above represent regional clusters it will be interesting to evaluate the impacts of this cases to identify the positive/negative effects to strength the waste management and spread the use of the instrument.

Since the allocation of regular solid waste is an attribution of the municipal administrations, the generalised implementation of a fee system for waste is difficult.

2.6. Informal sector in waste management

In this issue, Mexico City has a Solid Waste Law and its corresponding Regulations. The Comprehensive Solid Waste Management Program for Mexico City was published in 2016 and seeks to strengthen institutional co-ordination between centralised agencies and political delegations, to achieve compliance with the environmental policy on solid waste. This program is also the first example of integration of informal workers in the urban solid waste management process, as it underlines the importance of the co-ordination with the Sindicato Único de Trabajadores del Gobierno del Distrito Federal (Single Union of Workers of the Government of the Federal District), through the service providers public of cleaning, as well as with the guilds of selectors (pepenadores/dumpster divers).

In fiscal terms, facilities for people engaged in recycling have been established in the Federal Tax Code since 2014. This Code establishes that the Tax Administration Service (SAT) must implement a scheme to facilitate the verification for tax purposes for individuals and corporations that acquire waste and materials from the recycling industry.

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Under this scheme, waste and recycling material buyers can register the people who supply them with said good in the federal taxpayer’s registry. The SAT establishes the requirements for registration and the type of goods that can be considered as waste and recycling materials.

2.7. Public-private partnerships

The Law on Public-Private Partnerships was published in January 2012. It provides the national legal framework that allows this type of association. Article 2 of the Law states that public-private partnership projects refer to long-term contractual relationships between the public sector and private sector for the provision of services for the public sector. The main justification for resorting to this type of associations is the increase in social welfare. This is why projects must specify the benefit sought and demonstrate their financial advantage over other forms of financing. The public private partnerships (PPP) may arise though means of permits, licenses, concessions, and other authorisations to carry out projects or provide the corresponding services.

PPPs focused on the management of solid waste in municipalities that have limited financial resources, this allows authorities to move from being service providers to facilitators, focusing their activity on planning and supervision (Almeyda, no date).

The public sector maintains its role and responsibility in the performance of waste management, although the private sector designs, builds, finances, and operates the system. The private company can charge over several years, either through fees paid by users, through payments from the public authority or a combination of either.

The financing of integral waste management projects by national and international entities has been encouraged. This has increased the interaction of SEMARNAT with other institutions such as the Banco Nacional de Obras y Servicios Públicos (National Public Works and Services Bank, or BANOBRAS), the North American Development Bank (NADB), World Bank (WB), Inter-American Development Bank (IDB), and the German Development Bank (KFW Bankengruppe), something which undoubtedly facilitates private participation in projects on the subject.

The institutions that take advantage of urban solid waste and those of special management are SEMARNAT, SENER, SEDATU and CONACYT, while the Development Banks such as BANOBRAS, Nacional Financiera (NAFIN) and the Banco Nacional de Comercio Exterior (National Bank of Foreign Trade, or BANCOMEXT) are the sources of financial resources for waste to energy projects.

In recent years, in the framework of PPPs, BANOBRAS, and other agents have supported the following projects:

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Table 2.3. Projects of public-private partnerships in the field of waste management

Project Place Description Integrated management of solid waste

Tuxtla Gutiérrez, Chiapas

The project includes: mechanised sweeping in the main streets, collection, transfer, separation, and final disposal through the construction and operation of a sanitary landfill.

Puebla waste to fuel Puebla, Puebla Financial evaluation of an ethanol generation project through the use of urban solid waste.

BiSIMEPRODE Biogas system (Bioenergía de NL, BENLESA)

Salinas Victoria, Nuevo Leon

This private company is responsible for the operation of the electric power generation plant through the use of said plant. It uses waste from the Metropolitan Area of ??Monterrey, and in turn provides electricity to 13 associated entities through a cogeneration permit from the Energy Regulatory Commission.

Integral service of solid waste (Bio Sustainable Systems)

Coacalco de Berriozabal, Nicolás Romero, State of Mexico

Concession to provide exclusively to this location the public service of cleaning, in a modality of storage, collection, transportation, treatment and final disposal of urban solid waste generated in the municipality for 15 years. Concession for the provision of municipal public service for the final disposal of non-hazardous urban solid waste generated in the municipality for 25 years.

Plant to use the calorific value of urban solid waste

Mexico City Construction of a plant to use the calorific value of solid urban waste in Mexico City. It is expected that around 3 000 000 tons of organic waste will follow the path of compost, and another 3 000 000 thousand 500 tons of non-recyclable inorganic material will be destined to a thermic energy project. This will be used to supply electricity to the 12 lines of the Collective Transportation System (STC) with the use of the caloric value of the waste for the generation of energy.

Source: Elaboration with information from SEMARNAT-SENER-GIZ (2016), Price Water House Coopers, CEC and Pino Pérez.

More information

www.cca.org.mx/ps/funcionarios/muniapp/descargas/Documentos_de_apoyo/informaciontematica/capp/APP_Bioelectrica.pdf

www.cca.org.mx/ps/funcionarios/muniapp/descargas/Documentos_de_apoyo/informaciontematica/capp/Servicio_Residuos_Coacalco.pdf

www.gob.mx/cms/uploads/attachment/file/208269/Waste_APP_Miguel_Almeida.pdf

DOF (2014) "Regulation of the General Law for the Prevention and Integral Management of Residues" DOF 31-10-2014.

DOF (2015) "General Law for the Prevention and Integral Management of Residues" DOF 22-05-2015.

DOF (2016) "Law of Public-Private Partnerships" Last published reform DOF 21-04-2016.

DOF (2017) "Regulation of the Law on Public-Private Partnerships" Last published reform DOF 20-02-2017.

www.inecc.gob.mx/descargas/dgcenica/diagnostico_basico_extenso_2012.pdf

www.beta.inegi.org.mx/proyectos/censosgobierno/municipal/cngmd/2015/

www.inegi.org.mx/saladeprensa/boletines/2016/especiales/especiales2016_03_05.pdf

www.inegi.org.mx/saladeprensa/boletines/2016/especiales/especiales2016_11_10.pdf

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www.giz.de/en/downloads/giz2016-es-EnRes-Potencial_para_la_valorizacion_energetica.pdf

www.pwc.com/mx/es/industrias/infraestructura/archivo/2014-05-folleto-infraestructura.pdf

www.gob.mx/cms/uploads/attachment/file/180429/FOLLETO_BENEFICIOS_AMBIENTALES_Y_ECON_MICOS_2016.pdf

www.gob.mx/cms/uploads/attachment/file/229890/2017_Folleto_PLAC.pdf

www.gob.mx/profepa/acciones-y-programas/resultados-obtenidos

www.contraloriadelpoderlegislativo.gob.mx/pdf/Cursos/A_P_P.pdf

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3. Climate change

Box 3.1. Climate change: Recommendation 1

Take all necessary measures to implement the General Law on Climate Change; clarify the domestic emission reduction target and define an indicative allocation among sectors; identify least-cost ways to achieve the target within sectors and in general; ensure that targets and measures are adjusted on the basis of systematic, regular and independent assessments of progress; publish annual progress reports, and a GHG emission inventory at least every two years.

3.1. Implementation of the LGCC (general law on climate change)

A series of planning, regulatory, technical, economic, financial, monitoring, and evaluation instruments for public policy on climate change have been developed as of the publication of the LGCC in 2012.

Figure 3.1. Evolution of climate change policy

Source: SEMARNAT (2017).

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3.2. Planning instruments

In 2013 and 2014, the ENACC and the Programa Especial de Cambio Climatico 2014-18 (Special Climate Change Program, PECC 2014-18) were published. They represent the pillars of national climate change policy and outline the specific goals in terms of adaptation and mitigation. The ENACC is expected to be updated by 2018; it will incorporate the following changes: a) the adoption of new international commitments (such as the NDC), the development of scientific knowledge or relevant technologies, and the inclusion of relevant policies in environment, natural resources, economy, energy, sustainable transport, and health; b) adoption of an electronic monitoring platform for the PECC, under the denomination SIAT-PECC; which, unlike previous versions, will be based on an accessible open source code and will be available for use by the agencies that participate in the PECC. This platform will be financed with technical co-operation resources from the IDB.

Additionally, the Intersecretarial Commission for Climate Change (CICC) was formally set up in 2013 with the purpose of achieving adequate co-ordination among agencies of the Federal Public Administration in climate change matters. This commission is responsible for, among others, the formulation and implementation of national policies for climate change mitigation and adaptation, for the development of transversally and integrality criteria, and for the promotion of actions in the Convention to comply with the commitments made.

Even though the Commission had the general function of communicating the actions on climate change issues since 2006, as of the approval of the LGCC it began to have specific functions. Among the most important are the following: approval of the ENACC and the PECC; strengthening of the financial area´s capabilities for the adaptation to climate change, tracking of the Conference of Parties, creating a link with climate change policy regarding the 2030 Agenda for Sustainable Development, and co-ordinating the financing group of the Paris Agreement (SEMARNAT-DGCC-2017)

At the same time, progress has been made with the presentation of the National Strategy for Reducing Emissions from Deforestation and Degradation (ENAREDD+). This strategy refers to ecosystem-based adaptation and mitigation measures, since it seeks to completely reduce carbon loss in original forest ecosystems, as well as the creation of instruments for planning and policy planning in itself. (CONAFOR, 2016). All this in order to achieve the goals and actions proposed in the Paris agreements.

In December 2017, the Congress approved the reforms of the LGCC that states the alignment between the LGCC and the Paris Agreement, such that Mexico can comply with the established commitments, NDC, and states a mandatory carbon market.

3.3. Economic and financial instruments

The carbon tax was established in the Ley de Impuesto Especial sobre Producción y Servicios (Special Tax Law on Production and Services, or IEPS for its acronym in Spanish), where, depending on the total carbon content, fuels are taxed at different rates. The total collection of IEPS to fuels as of October 2017 was USD 9 814 million (MXN 191 265 million) (SHCP, s.a.), as shown in the following table

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Table 3.1. Total fuel tax revenue

2014 2015 2016 2017* Gasoline and Diesel IEPS 659 11 293 14 226 9 341 Carbon (Other fuels) 496 392 23 472 Total -163 11 685 14 249 9 814

Note: Up to November 2017. Source: Elaboration with data from SHCP (2017).

The creation of the Climate Change Fund (FCC) in November 2012 stands out among the financial instruments. This fund has channelled public and private financial resources to support the project implementation in terms of mitigation and adaptation. The FCC has received MXN 203 million from budgetary resources of the SEMARNAT since its creation. The type of projects supported are:

Education on climate change as well as environmental cultural awareness and dissemination of information

Adaptation of coastal ecosystems to climate change in the Natural Protected Areas Promotion of public transport and "zero carbon" urban mobility Use of natural gas as an alternative fuel in vehicle fleets Development of a Business Portfolio to boost Low Carbon Green Growth Carbon emissions compensation, resulting from the COP13 of Biodiversity

In order to consolidate the FCC as a financial mechanism that allows the implementation of projects to comply with Mexico's climate change commitments, a process to strengthen its regulatory and operational structures was initiated. The Operating Rules have been modified to strengthen; the relationship with the CICC, with the Technical Committee and with the Trustee (National Financiera), the working groups and the FCC's own operations. This changes will allow international organisations to be interested to download the financial resources to support compliance with the international commitments of Mexico on climate change and biodiversity through the FCC. These donations are for the amount of USD 54.15 million of as presented below:

Table 3.2. International Donations for Mexico's compliance with its international commitments on climate change and biodiversity

Organism Project Donation (in millions of

dollars) German Bank KfW Sierra y Mar (NPAs) 12 Global Environment Facility (GEF) Sustainable Productive Territories 21.9 Development Bank of Latin America (CAF)

Support for Climate Change policy (FCC support unit)

1

Inter-American Development Bank Implementation of the NDC on climate change in Mexico

0.5

Green Climate Fund National Adaptation Plan 3 French Development Agency Bioconnect (Ecological Connectivity) 1.75 German Bank KfW* FINANP (Financiamiento nuevas NPAs, or

Financing new NPAs) 14

Total 54.15

Note: *In negotiation. Source: SEMARNAT 2017.

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The Green Climate Fund (GCF), international banking institution, approved USD 42 million for financing of two regional climate change projects.

Another instrument that will support to comply Mexico´s commitments is the carbon market. A simulation exercise of the carbon market is taking place (design by SEMARNAT and operating through the Mexican Stock Exchange). This exercise formally began in November 2017. The roadmap presents that the market will be developed during 2018 in several "phases" that allow for participants to learn and better understand the different components that are involved in, and allow a carbon market to be operational.

Likewise, a working group, in conjunction with the private sector, was launched to work on Mexico's carbon market. The required studies will be presented to the group after its first formal meeting in December 2017. This will be the basis for discussion and decision making on the design of the carbon market in the country. International experiences from other markets will also be presented, along with opinions from the private sector on the processes to be followed for their total involvement.

During the One Planet summit, SEMARNAT announced the update of the LGCC that states the establishment of a mandatory carbon market that has been voluntary up until November 2017 (SEMARNAT, 2017). Market bases are expected to be published during the first semester of 2018. These bases will receive inputs from studies conducted by experts in national and international carbon markets issues. A pilot program of the carbon market in Mexico is expected to start during the second half of 2018.

3.4. Monitoring and evaluation instruments

The National Emissions Registry (RENE) and its Regulations were created for the monitoring and compilation of information on the emission of Greenhouse Gases and Compounds (CyGEI) of the different productive sectors of the country. The following sectors in particular are required to report if their emissions exceed 25 000 tCO₂e (tonnes of CO₂ equivalent): Energy, Industry, Transportation, Agriculture, Waste, and Trade and Services (SEMARNAT, 2017).

The RENE Regulations will be updated after the first three years of reporting emissions by Establishments Subject to Reporting, and the one-year experience of verifying establishments reports of more than 1 million tCO2e, with the objective of enabling the verification requirements and calendar to coincide or adhere to the carbon market process that will take place during 2018.

One of the modules to be developed, according to the RENE regulations, is the registration of emission reduction projects. This registry is voluntary and will be developed and implemented during 2018.

Three standards will be developed in 2018 for the application of the "Verification Criteria" based on the experience gained by verification of emissions and the results of its application, as well as on the requirements for validation and verification of emissions established in the RENE. These are:

• NOM on validation of emission reduction • NOM on verification of GHG emissions (associated with RENE reports) • NOM on direct measurement of GHG emissions.

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3.5. Mechanisms for co-ordinating climate change policy

The National System of Climate Change (SINACC) was established in 2014. This system arose from the need for co-ordination between federation, states and municipalities for the integration and operation of national climate change policy. The SINACC promotes concurrence and congruence among the programs, as well as actions and investments of the three levels of government with the ENACC and the PECC 2014-18.

3.6. International commitments on climate change

Mexico has leadership and commitment against climate change, becoming one of the first countries in developing actions committed to the voluntary reduction of GHG. In December 2015, Mexico presented the Nationally Determined Contributions (NDC) to the United Nations Framework Convention on Climate Change (UNFCCC) at the Conference of the Parties (COP-21) held in Paris. The NDCs define the actions that the country will carry out to contribute to the goal of reducing GHG emissions and Short- lived Climate Pollutants (CCVC) during the 2020-30 period. The mitigation goal set by the Mexican Government states the 22% reduction of GHG and 51% of CCVC.

Mexico's NDC contains two components, one for mitigation and the other for adaptation. The mitigation component includes two types of measures: unconditional measures, which refer to those that the country can solve with its own financial resources, and conditional measures, which require the establishment of a new international climate change regime in which Mexico could obtain additional financial resources and achieve effective technology transfer mechanisms.

The National Emissions Inventory (INEGyCEI) provide the estimation of anthropogenic emissions, as well as absorption by sinks. The first version covers the 1990-2002 period and the second includes the 1990-2010 period. This document, prepared by the INECC, is the basis for the preparation of the NDCs. The INEGyCEI was updated in 2016, in line with the provisions of article four of the UNFCCC.

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Figure 3.2. Mitigation goal of GHG emissions by sector

Source: SEMARNAT, (2017).

The INECC has carried out a cost benefit analysis to identify the most cost-efficient route for compliance with conditioned and unconditioned NDCs. More than 30 mitigation measures were analysed by sector: 8 from the transport sector, 4 from electricity generation, 2 from residential and commercial sector, 4 from oil and gas, 3 from agriculture and livestock, 2 from waste and 2 from land use change.

Mexico submitted the Ratification of the Paris Agreement to the UNFCCC in 2016. This came into force on November 4 of the same year. Likewise, Mid-Century Strategy was presented during the COP-22, which reiterated the commitment against climate change. In COP-23 held in Bonn, Germany during 2017 there was progress in the implementation of Paris Agreement as of 2020. One of the main topics was the design of a financial structure that would allow the achievement of goals and funds to help developing countries was among the most important issues.

In addition, Mexico joined the Carbon Pricing Leadership Coalition initiative, convened by the World Bank and the International Monetary Fund, which seeks the assignation of carbon price, as well as the correct understanding of this market after its implementation (World Bank, 2017).

In December 2018, Mexico commitments in the UN Planet Summit, to increase financial support for the IPCC, to promote scientific solutions to global warming. Likewise, Mexico and France signed an initiative to support adaptation and resilience to climate change in Caribbean nations, which are especially vulnerable to this phenomenon (President Office, 2017).

On the other hand, in the same Summit, Mexico signed the co-operative framework for Carbon Price in the Americas. With this statement, the leaders presented their joint vision for regional co-operation on carbon pricing and pledge to collaborate in strengthening the

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monitoring, reporting and verification systems of GHG emissions with the ultimate goal of establishing the necessary basis to link their carbon markets (SEMARNAT, 2017).

3.7. Emissions reports and inventories

Climate change main actions has been disseminated in different reports. Mexico has presented five National Communications to the UNFCCC, which aim to strengthen institutional capacities for the integration of climate change strategies within national priorities and comply with Mexico's obligations under the Convention Framework. The 6th National Communication is expected to be delivered by June 2018

The country has also submitted a First Biennial Update Report (BUR) to the UNFCCC, which is an effort to update the information provided in the national communications for Non-Annex 1 Parties (1/COP 16, paragraph 60) and provides the international community with information regarding the status of our climate change policies and programs. (SEMARNAT, 2015). The Second Biennial Update Report will be presented to the UNFCCC on 2018.

The Centro Mario Molina, in collaboration with INECC, prepared the document "Apoyo a la Iniciativa de Planificación Nacional sobre Contaminantes Climáticos de Vida Corta" (Support for the National Planning Initiative on Short-lived Climate Pollutants) as part of the cross-cutting initiative of the Climate and Clean Air Coalition to help countries that want to develop the priorities of their national strategy to reduce this type of pollutants. The long-term objective of the initiative is to support the integration of this type of pollutants into existing plans. Identifying and prioritising the strategies that countries can carry out and can be implemented within their existing air quality, climate change and development policies through the regulatory framework, as well as identifying ways to overcome obstacles and improve their planning strategies (INECC, 2015).

More information

https://www.gob.mx/semarnat/acciones-y-programas/registro-nacional-de-emisiones-rene

www.senado.gob.mx/comisiones/cambio_climatico/reu/docs/SHCP.pdf

http://carbonpricingdashboard.worldbank.org/

http://www.dof.gob.mx/nota_detalle.php?codigo=5481526&fecha=04/05/2017

www.gob.mx/inecc/acciones-y-programas/sistema-nacional-de-cambio-climatico-sinacc

www.inecc.gob.mx/descargas/cclimatico/2012_est_nal_cc.pdf

www.cepal.org/sites/default/files/events/files/fondo_para_el_cambio_climatico_2016_mexico.pdf

www.gob.mx/cms/uploads/attachment/file/225702/convocatoria102017.pdf

www.gob.mx/inecc/acciones-y-programas/contribuciones-previstas-y-determinadas-a-nivel-nacional-indc-para-adaptacion

www.gob.mx/gobmx/articulos/que-es-y-porque-beneficia-a-mexico-el-mercado-de-carbono

http://dof.gob.mx/nota_detalle.php?codigo=5303391&fecha=21/06/2013

www.gob.mx/inecc/acciones-y-programas/acciones-nacionalmente-apropiadas-de-mitigacion-namas

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www.semarnat.gob.mx/sites/default/files/documentos/programas/informes/5_Informe_Labores_SEMARNAT.pdf

www.gob.mx/presidencia/es/articulos/cumbre-one-planet-sobre-cambio-climatico-139872?idiom=es

www.gob.mx/semarnat/es/prensa/lideres-de-las-americas-se-comprometen-a-cooperacion-regional-en-torno-a-fijacion-de-precios-al-carbono?idiom=es

www.gob.mx/inecc/documentos/inventario-nacional-de-emisiones-de-gases-de-efecto-invernadero-con-cifras-1990-2010

www.gob.mx/cms/uploads/attachment/file/40813/2013_snap_mexico_esp.pd

Box 3.2. Climate change: Recommendation 3

In conjunction with gradually removing energy subsidies, identify and implement more cost-effective approaches for further improving energy efficiency, such as reducing losses in electricity distribution and transmission, reducing gas flaring, promoting co-generation in large industries, establishing a mandatory energy efficiency standard for new buildings and providing targeted support to enhance the energy efficiency of existing buildings.

3.8. Improvement in energy efficiency

One of the most significant improvements in terms of energy efficiency was the approval of the Energy Reform in 2013 that creates a new legal and institutional framework that profoundly modifies the hydrocarbon and electricity sectors (SENER-CONUEE, 2016).

Figure 3.3. Energy reform on renewable energies

Source: Elaboration with information from (SENER-CONUEE, 2016).

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In this context, the Ley de Transición Energética (Energy Transition Law, LTE) published in December 2015, has the purpose of regulating the sustainable use of energy, obligations in terms of Clean Energies and the reduction of polluting emissions in the Electric Power Industry. In addition, it establishes the planning instruments through which the roadmaps and goals to move towards a low carbon economy are defined.

In terms of the reduction of energy losses, the total losses in energy distribution in 2016 were 12.36% due to the modernisation of equipment, construction of infrastructure and improvement of operational practices. (CFE, 2016). These were reduced by 7.5% compared to the previous year, as shown in Figure 3.4, with which the downward trend continues since 2010, the year in which the central zone of the country was incorporated (CFE, 2016).

Figure 3.4. Energy losses due to electricity transmission

Source: Elaboration with CFE data, (2016).

Investments estimated by the Energy Reform in particular, reached USD 80 327 million, of which USD 6 600 million would be from clean electricity (SENER, 2017).

3.9. Energy efficiency objectives (medium and long-term goals)

The minimum goals of clean energy participation in the generation of electric power are established in third transitory article of the LTE:

Table 3.3. Minimum annual goal of clean energy participation in the generation of electricity

Year 2015 2018 2021 2024 2035 2050

Minimum annual goal of clean energy participation in the energy sector 20% 25% 30% 35% 40% 50%

Source: SENER-CONUEE (2016).

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Other instruments related to LTE were created to follow up on national energy efficiency goals. For example, the Programa Nacional para el Aprovechamiento Sustentable de la Energía (National Program for the Sustainable Use of Energy) and the Programa Especial de Transición Energética (Special Energy Transition Program, PETE) that establishes several objectives that are focused on implementing actions considered in the Strategy.

One of the most important instruments that will help to change the energy matrix are the Clean Energy Certificates (CEC). The aim of this CEC mechanism is to promote investment on new energy projects and give the right incentives for clean energy generators (SENER, 2016). Big consumers in the energy sector will have to show, through the acquisition of CECs, that 5.8% of their energy consumption comes from clean sources. For 2019, the Ministry of Energy will establish percentages of clean energy consumption for firms and certain users.

A series of Normas Oficiales Mexicanas de Eficiencia Energética (Official Mexican Energy Efficiency Standards) have been complementary developed in different topics such as: air conditioners, buildings, domestic appliances, lighting and industry. Furthermore, there are programs and actions focused on energy efficiency such as: Programa Ahórrate una luz (Save a Light Program), Programa Hipoteca Verde (Green Mortgage Program), Programa de Ahorro de Energía en la Administración Pública Federal (Energy Saving Program in the Federal Public Administration), Programa de Mejoramiento Sustentable en Vivienda Existente (Program for Sustainable Improvement in Existing Housing), Proyecto Nacional de Eficiencia Energética en Alumbrado Público Municipal (National Project for Energy Efficiency in Municipal Public Lighting), Programa Eficiencia Energética de FIRA (FIRA Energy Efficiency Program), and the Proyecto de Eficiencia y Sustentabilidad Energética en Municipios (Energy Efficiency and Sustainability in Municipalities Project, PRESEM).

In terms of new buildings, CONUEE has two types of regulations related to energy efficiency: systems and products. There are three regulations on systems that handle public lighting for residential and non-residential buildings and their surroundings. There are nine regulations on products that handle thermic insulation for industrial systems and buildings, air conditioners, self-ballasted fluorescent, light-emitting diode, and general lamps, and glass.

In terms of cogeneration, after the energy reform 14 different plants are working and produce 432 megawatts. These plants are mainly located in Veracruz (60%) and their production is directed to the chemical and petrochemical sectors (SENER, 2017).

More information

SENER. (30 May 2017). Primera Convocatoria del Fondo de Servicio Universal Eléctrico (FSUE) para Sistemas Aislados. Obtenido de Secretaría de Energía: www.gob.mx/sener/documentos/bases-de-la-primera-convocatoria-del-fondo-de-servicio-universal-electrico-fsue-para-sistemas-aislados

SENER-CONUEE. (2016). Estrategia de transición para promover el uso de tecnologías y combustibles más limpios. México: Secretaría de Energía-Comisión Nacional para el Uso Eficiente de la Energía.

www.gob.mx/sener/prensa/inversiones-estimadas-por-80-327-millones-de-dolares-debido-a-la-reforma-energetica-pjc

www.cfe.gob.mx/inversionistas/informacionareguladores/Documents/Informe%20Anual/Informe%20Anual%202016%20CFE.pdf

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www.gob.mx/sener/documentos/programa-especial-de-la-transicion-energetica-2017-2018

http://dof.gob.mx/nota_detalle.php?codigo=5342503&fecha=28/04/2014

http://dof.gob.mx/nota_detalle.php?codigo=5421295&fecha=24/12/2015

www.dof.gob.mx/nota_detalle.php?codigo=5282384&fecha=14/12/2012

www.gob.mx/cms/uploads/attachment/file/10233/Explicacion_ampliada_de_la_Reforma_Energetica1.pdf

http://dsiappsdev.semarnat.gob.mx/datos/portal/publicaciones/SEMARNAT_Logros_octubre_2017.pdf

Box 3.3. Climate change: Recommendation 6

Take further steps to reduce GHG emissions and local air pollutants from motorised transport, including by adopting vehicle fuel efficiency or CO2 emission standards, making vehicle inspection programs mandatory in all states and examining the potential role of indigenous biofuels as a transport fuel on the basis of a full life-cycle assessment of their environmental impacts.

3.10. Efficiency standard for new cars

In 2013, an official standard NOM-163-SEMARNAT-ENER-SCFI-2013 of energy efficiency for new light vehicles was issued. This standard regulates the average emissions allowed for cars and is currently a project to reform it in order to homologate to US EPA. This reform is looking to support the compliance of the 2025 climate change goals and the following objectives: i) to ensure the fulfilment of the LGCC's GHG mitigation goals and the NDCs compliance, ii) to homologate the regulations between Mexico, USA, and Canada, and iii) to harmonise the national environmental regulations regarding light vehicles across the country.

The reforms are being negotiated with the Asociación Mexicana de la Industria Automotriz (Mexican Association of the Automotive Industry, AMIA) and a discussion is taking place on the technical and economic differences that will allow to define whether harmonising our standards with the regulations of the EPA it is the best option. The benefits estimated for the implementation of the standard for the 2013-30 period are the reduction of gasoline consumption by 70 billion litres and the avoided 170 million tons of CO2e.

3.11. Mandatory vehicle inspection programs

A significant progress has been made to improve the air quality in the main cities. In 2016 an emergency official standard was published due to the high levels of pollutants presented. The NOM-EM-167-SEMARNAT- 2016 establishes the levels of pollutant emission for the vehicles that circulate in Mexico City, Hidalgo, State of Mexico, Morelos, Puebla, and Tlaxcala (Megalopolis); as well as the test methods and specifications of the equipment used for the certification. Its application came into force through mandatory vehicle verification programs of local governments on 1 July 2016.

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With this standard to 1.9 million vehicles that previously had hologram "0" passed to holograms "1" and "2" up until the first semester of 2017. Thus, every day, about 20% of the most polluting vehicular park stops circulating. The number of rejected vehicles due to failure of compliance with emission limits was doubled.

The definitive standard NOM-167-SEMARNAT-2017 was published on 18 May 2017 and will the health of the 37 million inhabitants of the Megalopolis. It "...establishes the maximum permissible emission limits of pollutants for motor vehicles circulating in the states of Mexico City, Hidalgo, State of Mexico, Morelos, Puebla, and Tlaxcala; the test methods for the evaluation of said limits and the specifications of information technologies and holograms ", which will improve the air quality of this area.

Thanks to the measures adopted by the Federal Government and Megalopolis Commission (CAMe), in spite of presenting atypical climatic conditions in the ozone season of 2017 (such high pressure system had not been seen in the last 20 years) ozone concentrations were well below 2016 levels. During 2016, there were 14 environmental contingencies due to ozone, while in 2017, only 2 episodes were presented.

More information

www.semarnat.gob.mx/sites/default/files/documentos/programas/informes/5_Informe_Labores_SEMARNAT.pdf

www.gob.mx/cms/uploads/attachment/file/195489/Logros_PROMARNAT_2016.pdf

www.dof.gob.mx/nota_detalle.php?codigo=5440157&fecha=07/06/2016

www.gob.mx/conuee/acciones-y-programas/offices-oficiales-mexicanas-en-eficiencia-energetica-vigentes

www.gob.mx/conuee/acciones-y-programas/normatividad-aplicable-edificaciones?state=published

Box 3.4. Climate change: Recommendation 8

Further develop and implement the climate adaptation strategy by involving all relevant sectors, subnational levels of government, business and civil society, for example by developing technical guidelines for sectors such as forestry; establish a robust, indicator based mechanism for monitoring and assessing progress in achieving objectives.

3.12. Instruments for adaptation to climate change policy.

The main instruments developed for guiding the national policy on adaptation to climate change at all levels in Mexico are the LGCC, ENACC and the PECC, that have the following objectives in terms of adaptation (DOF, 2012):

• Reducing social and ecosystem vulnerability to the effects of climate change. • Strengthening the resilience and resistance of natural and human systems.

In terms of monitoring the achievement of adaptation goals the following indicators presented in the PROMARNAT and the PECC were developed for the monitoring the progress:

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• Percentage of progress in the development of instruments that contribute to reduce the vulnerability to climate change of the population and the economic sectors.

• Percentage of surface area with Programas de Ordenamiento Ecológico del Territorio (Land-Use Planning Programs) or Programas de Desarrollo Urbano (Urban Development Programs) that integrate strategies or criteria for mitigation or adaptation to climate change.

• Vulnerability reduction index that presents the infrastructure and conservation, restoration, and sustainable management of natural capital actions.

• Health Vulnerability Index and Social Vulnerability Index, developed by the Centro Nacional de Prevención de Desastres (National Center for Disaster Prevention CENAPRED).

• In terms of economics and production there is an agricultural vulnerability index.

In the international context, Mexico participates in the Cancun Adaptation Framework (CAF), which aims to improve adaptation measures. As part of the CAF, the Parties established the Adaptation Committee to intensify efforts to provide technical support, information exchange, and provision. In the same context, the Fondo de Adaptación (Adaptation Fund) was created to finance specific projects and programs. In Mexico the Instituto Mexicano de Tecnología del Agua (Mexican Institute of Water Technology, IMTA) has been accredited by the Fund to function as a Entidad Nacional Implementadora (National Implementing Entity). (INECC, 2017)

Other tools that have emerged for the planning for adaptation measures and financial resource allocation is the Atlas Nacional de Vulnerabilidad ante el Cambio Climático (National Atlas of Vulnerability to Climate Change, ANVCC), developed by the INECC and the Metodología para la Priorización de Medidas de Adaptación frente al Cambio Climático (Methodology for the Prioritization of Adaptation Measures against the Climate Change) carried out by SEMARNAT and the German Cooperation Agency.

SEMARNAT has maintained its commitment for an Open Government on the issue of vulnerability and adaptation to climate change, therefore, the Ministry participates in the development of a Sistema de Información sobre Cambio Climático (Information System on Climate Change, SICC). In 2018 a platform on adaptation for decision making is expected to consolidate as part of the SICC.

As part of the NDCs for adaptation, different goals and actions were established to be carried out in the 2020-30 period. These are divided into three categories (INECC, 2015):

• Social sector: To achieve 50% resilience of the most vulnerable municipalities in the country.

• Adaptation based on Ecosystem: To reach a zero-net deforestation in 2030. • Strategic infrastructure and productive sectors: To install at the three levels of

government early warning systems and risk management.

In 2018 significant efforts will be made to create the Programa Nacional de Adaptacion (National Adaptation Program), which will focus on the characterisation of the adaptation component of the NDCs. This work involves the specific activities for NDC implementation and estimation of the costs or investment needs, as well as the preparation of a portfolio of actions or projects that work towards meeting the 2030 adaptation goals. The financial mechanism to be used to develop the actions and tools is the GCF. The Atlas Nacional de Vulnerabilidad (National Atlas of Vulnerability), the

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development of the land-use planning of the territory with adaptation criteria and the early warning system will be some of the tools that will be finance with the GCF fund

More information:

INECC. (11 November 2016). Acciones Nacionalmente Apropiadas de Mitigación (NAMAs). Obtenido de Instituto Nacional de Ecología y Cambio Climático: www.gob.mx/inecc/acciones-y-programas/acciones-nacionalmente-apropiadas-de-mitigacion-namas

INECC. (9 November 2017). Adaptación al Cambio Climático. Obtenido de www.gob.mx/inecc/acciones-y-programas/adaptacion-al-cambio-climatico-78748

www.conafor.gob.mx/web/temas-forestales/bycc/redd-en-mexico/estrategia-nacional-redd-enaredd/

www.semarnat.gob.mx/sites/default/files/documentos/transparencia/programa_especial_de_cambio_climatico_2014-2018.pdf

www.gob.mx/inecc/acciones-y-programas/adaptacion-al-cambio-climatico-78748

www.dof.gob.mx/nota_detalle.php?codigo=5301093&fecha=03/06/2013

www.semarnat.gob.mx/archivosanteriores/Documents/PROMARNAT%202013-2018.pdf

www.gob.mx/inecc/acciones-y-programas/atlas-nacional-de-vulnerabilidad-ante-el-cambio-climatico-anvcc-80137

www.gob.mx/inecc/acciones-y-programas/sistema-de-informacion-sobre-el-cambio-climatico

www.gob.mx/inecc/acciones-y-programas/contribuciones-previstas-y-determinadas-a-nivel-nacional-indc-para-adaptacion

www.gob.mx/inecc/acciones-y-programas/adaptacion-al-cambio-climatico-78748

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4. Forests and biodiversity

Box 4.1. Forests and biodiversity: Recommendation 1

Update the 2000 National Biodiversity Strategy and Action Plan to reflect the 2011-20 Aichi biodiversity targets and other measures agreed under the Convention on Biological Diversity in 2010; develop an action plan to achieve the target for protected areas that optimises the conservation of biodiversity and ecosystems, and provides adequate management and financial resources.

Mexico updated its Estrategia Nacional sobre Biodiversidad (National Strategy on Biodiversity, ENBioMex) along with its 2016-30 Action Plan, which was presented on COP13. This strategy considers the commitments that Mexico acquired at the Convention on Biological Diversity (CBD) regarding the 2011-20 Strategic Plan for Biodiversity, the Aichi Goals and the 2030 Agenda.

The CONABIO, being the focal point of the CBD in Mexico, was the institution that co-ordinated the process of updating the ENBioMex. This Strategy is a guiding document that presents the main elements needed for conserving, restoring, and sustainable biodiversity management and the environmental and ecological services that it provides in the short, medium, and long term.

The ENBioMEX includes a mission and vision towards 2030 and establishes 14 guiding principles in 6 different components: i) knowledge; b) conservation and restoration, ii) sustainable use and management, iii) attention to drivers of pressure, iv) education, communication and environmental culture and v) integration and governance (CONABIO, 2017). The implementation of the ENBioMEX represents an opportunity to integrate conservation and sustainable use of biodiversity criteria in the policies and programs of all economic sectors.

One of the main issues incorporated in this strategy is the gender approach. This relevant aspect of the strategy shows the relationship between biodiversity and gender, as well as gender issues that seek to reduce inequalities between men and women.

Mexico joined the Biodiversity Finance Initiative (BIOFIN), supported by the United Nations Development Program (UNDP), in 2015, in order to calculate the cost of implementing the strategy. The results show that for the conservation and restoration component an approximate amount of USD 82 million (MXN 1,600 million) per year up to 2020, will be required, which means that it requires greater investment compared to the other strategic components (UNDP-BIOFIN, 2017).

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Figure 4.1. Implementation costs of the ENBiomex

Source: Elaboration with data from UNDP-BIOFIN (2017).

In terms of the regulatory framework, in October 2017 a General Law on Biodiversity was presented to the Congress which sets the foundation for the establishment of integral public policies as well as for a legal and effective protection of biodiversity. The proposed law incorporates various aspects such as: the inclusion of the Nagoya Protocol; mainstreaming biodiversity across economic sectors; the strengthening and updating of the provisions of the Ley General de Vida Silvestre (General Law on Wildlife), as well as the conservation of biodiversity in Mexico (CEMDA, 2017).

The progress on conservation policy is outstanding. Between September 2016 and June 2017, the decrees of five NPAs were published in the DOF. As of June 2017, there was an accumulated total of 182 NPAs, covering a total area of 90 839 521.5 ha, of which 21 380 773.4 ha correspond to land and emerged island surface, and 69 458 748.1 ha to marine areas, representing 10.9% and 22.1% of national terrestrial and marine surface, respectively (SEMARNAT, 2017).

Another achievement was that Mexico has met the Aichi Goal for marine surface protection (10%). The percentage of marine surface protection in Mexico is more than the double of the Aichi Goal percentage.

A pending challenge with respect to the effectiveness of NPA management is to increase the number of management programs that are published. In this administration, there was an increase from 67 management programs in 2012 to 111 in 2017. These management programs cover an area of 21.2 million ha, which corresponds to 82.6% of the total NPA (150 NPA) that could currently have a management program.

In November 2017, Revillagigedo was declared a national marine park. This NPA covers a total of 14 million hectares. This declaration makes this park the largest in North America that restricts fishing activity.

20,320

31,186

9,486 7,298

1,335 2,281

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Mil

lio

ns

of

do

lla

rs

Knowledge

Conservation and restoration

Sustainable use and management

Attention drivers of pressure

Environmental education,communication, and culture

Integration and environmentalgovernance

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More information

www.semarnat.gob.mx/sites/default/files/documentos/programas/informes/5_Informe_Labores_SEMARNAT.pdf

www.gob.mx/conabio/articulos/estrategia-nacional-sobre-biodiversidad-de-mexico-y-plan-de-accion-2016-2030?idiom=es

www.mx.undp.org/content/mexico/es/home/operations/projects/environment_and_energy/biofin-mexico.html

http://cop13.mx/cop-13/

Box 4.2. Forests and biodiversity: Recommendation 2

Establish a high-level inter-ministerial task force (similar to the one for climate change) to promote economically and environmentally sustainable use of ecosystems and biodiversity.

One of the central issues during COP13 was mainstreaming biodiversity conservation and sustainable use in sectorial plans, programs and policies, with emphasis on the agricultural, forestry, fishery, and tourism sectors. This integration is not an easy process, since it requires the commitment of the different productive sectors.

In the context of COP13, SEMARNAT and SAGARPA signed a historic agreement to develop joint actions to prevent the land use change from forest areas to agricultural land. Through this agreement, the development of a working plan between agencies will be possible; likewise, public policies that promote agricultural activity will be implemented incorporating the conservation and sustainable use criteria of biodiversity. An important effort in this matter is the development of a geographic information tool that evaluates whether agricultural subsidies would damage biodiversity, and propose alternative spatial distributions to minimise this effect. Also, one of the achievements in 2017 was the introduction of environmental criteria in the rules of operation of agricultural subsidy programs.

In addition, SAGARPA-CONAFOR signed a collaboration agreement in the COP13, which aims to promote and facilitate public management with a territory based approach that allows the integration and alignment of agricultural and forestry public policies. The agreement's target the ejidos, communities, and small land owners in rural areas, through the promotion of sustainable agricultural, livestock and forestry activities as well as the conservation and protection of our natural heritage and the support for the formation of social enterprises by women beekeepers. The alignment of incentives began with the formulation of proposals for integrated projects of Payment for Environmental Services (PES) and family run beekeeping business operated by women in rural areas of high marginalisation.

The elaboration of the National Strategy represents a significant step forward in the mainstreaming of biodiversity in policies between sectors. The aim of the strategy is to define the main lines of action that will guide the development strategies of the present and future governments, identifying emblematic public policies that contribute to the fulfilment of the Sustainable Development Goals (SDGs), among which are implicit the care and conservation of biodiversity.

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In terms of the intersecretarial commission recommendation, Mexico has the CONABIO, which has inter-secretarial board to promote the sustainable use of ecosystems and biodiversity, as well as generating valuable information to improve decision-making throughout the administration.

The ENBioMex proposes the creation of an inter-institutional mechanism for the integration of biodiversity that would be formed by APF actors. This highlights that the inter-ministerial commissions have an important potential for the transversality of public policies regarding the conservation and sustainable use of biodiversity (BIOFIN 2017).

One of the main challenges is to have in each of the dependencies of the APF a specific office focused on biodiversity, something that can contribute to the integration of conservation and the sustainable use of biodiversity in sectoral plans, programs, and policies.

More information

http://cop13.mx/cop-13/

www.onu.org.mx/agenda-2030/

www.gob.mx/conabio

www.gob.mx/semarnat/articulos/mexico-sede-de-la-cop13-sobre-biodiversidad-62953?idiom=es

www.biodiversidad.gob.mx/pais/pdf/ENBIOMEX_baja.pdf

www.conafor.gob.mx/web/temas-forestales/bycc/redd-en-mexico/estrategia-nacional-redd-enaredd/

www.sagarpa.gob.mx/Delegaciones/jalisco/boletines/Paginas/2016B12002.aspx

www.biodiversityfinance.net/mexico

Box 4.3. Forests and biodiversity: Recommendation 3

Strengthen economic analysis of biodiversity to support implementation of more efficient and effective policies; complete the planned study of the economics of biodiversity; develop business-as-usual projections to identify future pressures on biodiversity.

4.1. Economic value of biodiversity

In Mexico the economic valuation of environment, natural resources, and biodiversity has had different drivers for use for decision makers among these are the following: the design of an economic instrument, the definition of fines, the establishment of compensations for environmental damages, the evaluation of projects and the justification of the budget.

The use of economic analysis, focused on decision making in regard to biodiversity, has been strengthened in different ways in this administration. One of the most important has been in the consolidation of the policy to rescue the Vaquita Marina, where economic analysis of the policy options was carried.

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In order to cover the matter and highlight the of economic valuation of ecosystems goods and services, SEMARNAT, through the Undersecretary of Planning and Environmental Policy, launched an Inter-Institutional Strategy in 2015 that set up a working group to generate synergies among the different economic valuation initiatives. The group seeks to strengthen work related to the economic assessment of ecosystems by exchanging experiences in terms of the assessment methodologies used, databases, institutional synergies, and any other type of contribution that can be made by participants.

In addition, this group has an agenda which includes and lays out the foundation for the generation of information associated with the assessment and its connection to different policy objectives. This would enable the integration of the value of natural capital for decision making aimed at improving environmental, economic and social well-being, instead of isolated assessment or academic exercises. The working group is composed of national and international institutions among which are: CONANP, CONABIO, CONAFOR, SEMARNAT, PROFEPA, INEGI, IMTA, UN Environment, UNDP, GIZ, World Wide Fund for Nature (WWF), The Nature Conservancy (TNC), CI and the FMCN.

4.2. Initiative on the economics of ecosystems and biodiversity (TEEB)

The United Nations Environment Program (UNEP) and SEMARNAT launched the Ecosystem and Biodiversity Economy for Mexico-TEEB initiative in 2014, which aims to reduce the pressures and threats to the country's natural resources through promoting the incorporation of the economic value of biodiversity and ecosystem services in the public and private sector decision making. The initiative aims to contribute to the country's sustainable development and international commitments such as the Aichi Targets, the Paris Agreement, as well as the SDGs.

The TEEB-Mexico implementation efforts have focused on the agriculture and food sector. In this regard, UNEP, together with the United Nations Food and Agriculture Organization (FAO) and the German Technical Cooperation Agency (GIZ), carry out the TEEB-AgriFood project. The objective of the study is to develop an economic assessment of important environmental services for the primary sector and show how they are affected by unsustainable agricultural practices. It will also develop recommendations for public policies focused on the integration of the economic value of biodiversity and ecosystem services in decision making and agricultural practices in Mexico (TEEB, 2017)

4.3. EcoValor Mx initiative - natural protected areas (CONANP)

A significant step forward in terms of economic assessment of natural resources is the EcoValor Mx initiative, which arises from co-operation between the Government of Mexico, thorough CONANP, and the Government of Germany by means of GIZ. The creation of the EcoValorMx has helped to comply with international commitments aimed at the preservation of biodiversity and the mitigation of climate change (Ecovalor, 2017).

Through this project different economic assessment exercises of the ecosystem services in NPAs have been carried to show how they contribute to their sustainable management. The economic assessment of the environmental services was developed at three different sites: Parque Nacional Cabo Pulmo (Cabo Pulmo National Park), Parque Nacional Izta-Popo (Izta-Popo National Park), and the Área de Protección de Flora y Fauna Isla de Cozumel (Flora and Fauna Protection Area of Cozumel Island).

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Based on the valuation of strategic ecosystem services, this initiative also seeks to provide qualitative and quantitative arguments regarding the links and relationships that exist between NPAs, key economic and productive sectors in Mexico.

4.4. System of environmental-economic accounting, experimental ecosystem accounting. (SEEA-EEA-Mexico)

Since 2013, Mexico has promoted the Experimental Ecosystem Accounting project. This project is the result of an invitation from the United Nations Statistics Division (UNSD) as well as the United Nations Environment Program (UNEP) to participate in implementation. In the first stage of the project, Mexico was selected as a pilot country, and the Instituto Nacional de Estadística y Geografía (National Institute of Statistics and Geography, INEGI) is the focal point to carry out the following activities: establish a working group at the national level and serve as main link.

The ecosystem's experimental accounts represent a tool to identify and monitor its contribution to economic activity in national accounts and aims to measure ecosystems in physical and monetary units. This project has an inter-institutional working group of policy designers and technicians that determine the case studies to be carried out in 2018 that are relevant for decision-making.

4.5. Use of economic assessment for compensation of environmental damage, federal law of environmental responsibility (equivalence criteria)

The LFRA regulates environmental responsibility that arises from damage caused to the environment, as well as the repair and compensation measures to mitigate the damages when they are required, through stipulated federal judicial process. The LFRA states that for environmental damages an economic sanction or environmental compensation will be imposed.

The law also establishes a series of observations to determine which measures of environmental compensation will be considered (Art. 39 LFRA). These include the criterion of resource-resource or service-service equivalence as well as actions that provide natural resources or environmental services of the same quality, quantity, and type as those damaged, to restore the habitat to its base state. In this case, to do the necessary calculations an equivalent habitat methodology would be used.

4.6. Other initiatives for economic assessment of biodiversity in Mexico

CONABIO leads an economic assessment initiative that seeks to ensure the genetic biodiversity conservation of traditional agroecosystems in Mexico. CONAFOR, together with INECC, is developing an economic assessment tool for forests and jungles.

More information

www.inegi.org.mx/est/contenidos/proyectos/cn/ee/ www.teebweb.org/teeb-mexico/iniciativa/ www.teebweb.org/agriculture-and-food/ www.ecovalor.mx/material-ecovalor.html www.diputados.gob.mx/LeyesBiblio/pdf/LFRA.pdf www.semarnat.gob.mx/gobmx/transparencia/trendicion.html

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Box 4.4. Forests and biodiversity: Recommendation 4

Review the efficiency and effectiveness of economic instruments for the conservation and sustainable use of biodiversity and forests; assess the feasibility of new instruments based on the polluter-pays principle.

Mexico has developed economic instruments that focused on the conservation and sustainable use of biodiversity such as i) entrance fee to protected areas, ii) payment for environmental services, iii) subsidies for reforestation, iv) pesticide taxes, v) promotion of conservation and the sustainable use of wildlife, through the management of Environmental Management Units (UMAs) and vi) compensation mechanisms for Vaquita Marina preservation.

4.7. Entrance fee to natural protected areas

This economic instrument has been in operation for 16 years and is defined in the Ley Federal de Derechos (Federal Law of Rights) as a charge for use, enjoyment and recreational use of marine and terrestrial Natural Protected Areas.

It was very successful up to 2013, when the money collected by the NPAs was returned to the regions and NPAs that generated it. However, the earmarked revenue has not been fulfilled and there have been failures in the implementation of the instrument by SHCP. SEMARNAT is working on various mechanisms so that the Undersecretary of Expenditures of SHCP complies with delivering the funds to their specific destination.

4.8. Payment for environmental services (PES)

Payment for environmental services (PES) is an essential instrument for the conservation of forests in Mexico. It has different modalities: Payment for Hydrological Environmental Services (PSAH) and PES for Conservation of Biodiversity.

The Federal Government in order to encourage long-term provision of environmental services, promotes the incorporation of forest lands into the PES program. This mechanism supports owners and holders of forest lands with economic incentives to keep them in optimal conditions and carry out good forest management practices under an active conservation approach (SEMARNAT, 2016). From January 2013 to June 2017, MXN 208.2 million were allocated to 241 beneficiaries for the incorporation of 129 603.5 ha to the payment for environmental services.

Currently, the PES is evaluated in terms of environmental, social, and economic impacts, which represent the first environmental impact assessment of the sector. The results of this evaluation show that the program has had a positive effect forest lands.

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Figure 4.2. Area with resources allocated for inclusion in the PES for the 2013-17 period (ha)

Note: For the year 2017 the figures correspond to the end of June. Source: Elaboration with data from SEMARNAT (2016).

4.9. Subsidies for reforestation

The restructure and reengineering of the forest restoration program towards an integral scheme have had good results. The program co-ordinates actions from the plant production process, from its verification and certification, its transport in refrigerated containers, to the articulation of soil conservation and restoration actions, with the reforestation, protection, and maintenance of the reforested areas (SEMARNAT, 2017). From 2013 to 2017, 873 012 ha were reforested, which is 89% of the progress of this administration goal of one million ha with reforestation actions. Notably, the survival rate was 63%. In previous administrations, it was reported that the survival rate was 30% or even less.

4.10. Pesticide taxes

The pesticide tax was established due to the use of many pesticides with high environmental risks, including to water and food, as well as serious effects on the health of the inhabitants, in agricultural practices. (SHCP, 2014). This tax on pesticides, herbicides, and fungicides is according to the level toxicity. The total amount of tax revenues collected by the federal government from the pesticide tax was USD 109 million (MXN 2 133.32 million) from February 2014 to September 2017 period.

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Figure 4.3. Federal government tax revenues from pesticide taxes (millions of pesos)

Source: Elaboration with data from SHCP (2017).

4.11. Management units for the conservation of wildlife system

The Management units for the conservation of wildlife system (SUMA) arose in response to the need to reconcile and reinforce the conservation of biodiversity with the production and socioeconomic development needs of Mexico. The SUMAs growth from 2012 to 30 June 2017 consisted of the registration of 1 722 UMA (1 477 of extensive management and 245 of intensive management) and 2.9 million ha. From 2013 to 2016, 577 projects were supported through subsidies to UMAS for a total amount of USD 28 million (MXN 552.9 million) in 31 states.

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Figure 4.4. Area of management units for wildlife conservation (UMA), 2017

Source: SEMARNAT-DGVS (2017).

4.12. Instruments for the rescue and conservation of the Vaquita Marina

The population of the Vaquita Marina has declined due to the following factors: use of fishing gear such as gillnets and the illegal totoaba fishing. The protection of the porpoise has been a priority since the beginning of the administration, as it is an endemic and emblematic species of Mexico. In this regard, the federal government has promoted a series of actions aimed for the preservation of the species.

In 2013, the Comisión Asesora de la Presidencia de México para la Recuperación de la Vaquita Marina (Advisory Commission of the Mexican Presidency for the Recovery of the Vaquita Marina) was installed, with the purpose of proposing environmental, economic, and social strategies and actions. In 2015 the Integral Strategy for the Recovery of the Vaquita Marina and the Totoaba was presented.

The main actions of the Strategy are: a) the polygon of protection in the Upper Gulf of California was extended to guarantee the coverage of the specie's area of distribution; b) the permanent suspension of commercial fishing with gillnets was decreed; c) economic compensation measures were granted to provide income to fishermen in the region, in an amount exceeding USD 56 million (MXN 1 100 million); d) the implementation of the SEMAR Inspection and Surveillance Program, e) the incorporation of the Gendarmería Ambiental (Environmental Gendarmerie) in the inspection and surveillance work done in the Upper Gulf of California, and the Reforma a la Ley Contra la Delincuencia Organizada (Reform of the Law against Organized Crime).

The Strategy presents different alternatives for the Vaquita Conservation such as the use of sustainable fishing gear (suripera net for shrimp, enclosure nets and multilines for sierra, etc.) as well as alternative activities such as totoaba aquaculture, sport fishing, use of flora and fauna, tourism among others.

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In 2017, the promotion of the Vaquita Conservation, Protection, and Recovery Program (Vaquita CPR) has the objective to capture and transfer of vaquita specimens from the wild to a temporary sanctuary, in order to keep some individuals away from the threat of gillnets. The program, pretend to reproduce them in captivity to reach a number of specimens that can be returned to their natural habitat, and their release once the complete elimination of the use of fishing gear that captures them is achieved. This is a pioneering project worldwide due to the scale at which it is being carried out. It has the participation of around 50 experts from Asia, Europe, Oceania, North America, and, of course, Mexico.

More information:

www.gob.mx/conafor/acciones-y-programas/sistema-nacional-de-informacion-forestal-snif

www.semarnat.gob.mx/temas/estadisticas-ambientales/badesniar

www.semarnat.gob.mx/sites/default/files/documentos/programas/informes/5_Informe_Labores_SEMARNAT.pdf

www.biodiversidad.gob.mx/usos/UMAs.html

www.conafor.gob.mx/web/temas-forestales/servicios-ambientales/

http://cuentapublica.hacienda.gob.mx/es/CP/2016

www.fao.org/3/a-i4808s.pdf

http://dsiappsdev.semarnat.gob.mx/datos/portal/publicaciones/SEMARNAT_Logros_octubre_2017.pdf

www.semarnat.gob.mx/sites/default/files/documentos/programas/informes/5_Informe_Labores_SEMARNAT.pdf

www.gob.mx/conanp/acciones-y-programas/ingresos-excedentes-por-cobro-de-derechos

www.gob.mx/vaquita-marina

Box 4.5. Forests and biodiversity: Recommendation 6

Identify opportunities to further engage the private sector in the conservation and sustainable use of biodiversity through, for example, the strengthening of timber and eco-tourism certification.

In 2016, institutions and private sector companies such as: CESPEDES, PRONATURA, The Nature Conservancy, Rainforest Alliance, Conservación International México, Reforestamos México, CitiBanamex, BASF, BIMBO, Cemex, Grupo México, among others formed the Alianza Mexicana de Biodiversidad y Negocios (Mexican Alliance of Biodiversity and Business, AMEBIN). This alliance will serve as a permanent mechanism for intersectorial dialogue, with a business perspective, to address issues related to the conservation, sustainable use and restoration of biodiversity in Mexico (CESPEDES, 2017).

Some of the objectives of the AMEBIN are: to make companies aware of the importance of biodiversity and ecosystems for businesses and value chains, and promote investments of companies and institutions for the sustainable use, conservation or restoration of the biodiversity and natural resources.

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4.13. Forest certification

In order to promote the certification of good forest management, Mexico has three schemes that are integrated into the Sistema Nacional de Certificación Forestal (National System of Forest Certification, SCEFORMEX), such certifications are: the preventive technical audits, national forest certification process through the Mexican Standard NMX-AA-143-SCFI-2015 or certification processes under international standards (SEMARNAT, 2016).

Table 4.1. Area under forest management (thousands of ha)

Year ATP Certification NMX certification FSC certification 2012 171.46 35.89 618.85 2013 446.27 73.09 768.99 2014 545.16 339.98 822.92 2015 449.96 911.4 821.14 2016 280.26 874.18 826.58

Source: SEMARNAT, 2016.

Since 2014, the National Forestry Commission (CONAFOR) has been biennially developing the Expo-Forestal, through which points of convergence are established to find business opportunities among the various actors involved in forestry sector. In 2016, CONAFOR served as the witness of honour for the signing of the Strategic Alliance for the Development of the FSC Supply Chain, with which civil associations seek to reduce illegal logging in forests through wood certification. This alliance allows wood producers to have a greater number of businesses with certified products and become potential beneficiaries of more government support (CONAFOR, 2016).

The 20x20 initiative (Bonn Challenge) emerges as a project for the restoration of degraded soils in different countries across Latin America and the Caribbean, where each of the participant countries assume national and international commitments. Its goal is the restoration of 20 million ha of land by 2020. Through this 20X20 initiative, countries work with leading research centres and with the private sector to restore degraded lands. This will result in carbon capture, reforestation, more productive agriculture, less deforestation and improved livelihoods (IUCN, 2017).

Mexico’s commitment is to restore 8.5 million ha. In this sense, different companies of the private sector have launched innovative projects focused on soil restoration. As an example, the company Maxiterra has a business model focused on increasing Mexican countryside productivity through a sustainable model for small producers. This has led to the restoration of 1.4 ha of soil through the cultivation of cocoa.

4.14. Certification of the tourism sector

SEMARNAT promotes the Norma Mexicana de Ecotourism (Mexican Ecotourism Standard) as a voluntary norm whose purpose is to encourage the implementation of good environmental practices in ecotourism companies.

The Mexican Standard NMX-AA-133-SCFI-2013 has as an objective the establishment of requirements and specifications of environmental performance in ecotourism, as well as assessment of the conformity procedure for certification purposes. The norm is of

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voluntary compliance and applies to natural or moral persons and people interested in the sustainable performance and good environmental practices in ecotourism in the national territory. (DOF, 2014)

More information:

www.cespedes.org.mx/alianza-mexicana-de-biodiversidad-y-negocios/

www.mexicoambiental.com/v2/cop-13-sector-privado-se-compromete-la-biodiversidad-en-sus-operaciones/

www.gob.mx/conafor/acciones-y-programas/sistema-nacional-de-informacion-forestal-snif

www.iucn.org/es/content/pa%C3%ADses-de-latinoam%C3%A9rica-y-el-caribe-lanzan-la-iniciativa-20x20-para-restaurar-20-millones-de

http://adventuremexico.travel/organizaciones/ecoturismo-certificado/norma-mexicana-de-ecoturismo/

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Annex A. Table of selected indicators

BASIC STATISTICS OF MEXICO (2012-15 or latest available year)

2012 2013 2014 2015 OCDE Total* People and society

Population (million) 117.1 118.4 119.7 1 286 Rural (%) 36.6 25.1 Intermediate (%) 17.4 27.3 Urban (%) 46.0 48.5 Population density per Km2 Population compound annual growth rate, latest 5 years 1.2 1.1 1.1 35.4 Income inequality (Gini coefficient) 0.5 0.5 0.32 Poverty rate (ratio of population with less than 50% med. Income) 0.2 0.2 0.1

Life expectancy 74.4 74.6 74.8 75.0 80.1 Economy and external accounts

Total GDP (GDP, national currency, millions) 15 599 271 16 078 960 17 217 016 18 194 758 Total GDP (Million US dollars, 2016) 1 984 966 2 039 349 2 151 633 2 165 290 53 867 130 Total GDP (GDP, 2010 PPP, million) 1 870 646 1 897 015 1 939 619 1 990 232 GDP, latest 5-year average growth (real GDP growth) 4.0 1.4 2.3 2.6 1.8 GDP per capita (USD current PPPs) 16 958 17 225 17 973 17 894 42 907 Value added shares (%) Agriculture, forestry, fishing 3.3 3.3 3.3 3.3 1.8 Industry including energy 28.4 27.1 27.0 25.3 24.8

Manufacturing 18.0 17.7 17.8 18.9 Construction 8.0 7.4 7.4 7.5 Wholesale, retail trade, repairs, transport, accomm., food services 24.3 25.1 25.4 26.7 Information, communication 2.4 2.4 2.3 2.2 Finance and insurance 3.4 3.7 3.7 3.9 Real estate 11.3 11.4 11.2 11.2 Professional, scientific, support services 6.2 6.4 6.4 6.4 Public admin., defense, education, health, social work 10.6 11.0 11.1 11.3 Other services (ISIC Rev.4 R - U) 2.1 2.1 2.1 2.2

Services 60.3 62.2 62.3 63.9 73.4 Exports of goods and services (% of GDP) 32.7 31.9 32.4 35.2 28.9 Imports of goods and services (% of GDP) 33.8 32.7 33.4 37.2 28.5

General Government General government spending (% of GDP) General government spending (Thousand US dollars/capita) 4 152 4 184 4 436 4 391 18 608 General government revenue (% of GDP) 24.4 24.5 24.1 23.7 38.1 General government revenue (Thousand US dollars/capita) 4 130 4 222 4 325 4 232 18 050 General government debt (% of GDP) 49.7 49.2 45.0 53.3 112.0 Education spending (% of GDP) 5.2 5.2 5.4 5.2 Public spending on education (% of GDP) 4.2 4.4 Health spending (% of GDP) 5.9 6.0 5.7 5.9 7.8 Environmental protection expenditure (Million MXN) 139 407.4 Environmentally related tax revenue (% of GDP) -1.1 -0.3 0.1 1.6

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Labour market, skills and innovation Unemployment rate (% of civilian labour force) 5.0 4.9 4.8 4.4 6.3 Tertiary education attainment of 25-to-64 years old (%) 15.7 16.2 16.0 16.3 35.7 Gross expenditure on R&D (% of GDP) 0.5 0.5 0.5 0.5 2.4 Patent applications in environment-related technologies (% of all technologies, average of latest 3 years) 12.2 11.3 10.6 10.9

Environmental management Water-related adaptation technologies Climate change mitigation technologies Environmental management 74.3 62.3 93.3 Water-related adaptation technologies 7.0 5.5 9.5 Climate change mitigation technologies 127.3 78.7 103.7

Environment Energy intensity: TPES per capita (toe/cap) 1.59 1.57 1.51 1.49 4.1 TPES per GDP (toe/ 1000 USD, 2010 PPP) 0.10 0.10 0.10 0.09 0.11 Renewables (% of TPES) 7.6 7.8 8.5 8.3 9.7 Carbon intensity (energy-related CO2): per capita (t/cap) 3.9 3.8 3.6 3.7 9.2 per GDP (t/ 1000 USD, 2010 PPP) GHG intensity a per capita (t/cap) 5.3 12.02 per GDP (t/ 1000 USD, 2010 PPP) Exposure to air pollution (PM 2.5) (µg / m3) 16.4 16.9 13.3 14.5 Road vehicle stock (veh/ 100 inhabitants) Water stress (abstraction as % of available resources) 17.5 17.3 18.0 9.69 Water abstraction per capita (m3/cap/year) 706.8 689.7 709.4 812 Municipal waste per capita (kg/capita) 359.7 520 Material productivity (USD, 2010 PPP/ DMC, kg) Land area (1000 km2) 1 944 1 944 1 944 34 404 % of arable land and permanent crops 13.3 13.2 13.2 12.2 % of permanent meadows and pastures 41.6 41.7 41.7 23.4 % of forest area 34.1 34.1 34.0 31.3 % of other land (built-up and other land) 11.0 11.0 11.1 33.1 *OECD Total refers to year of latest available data a) Excluding emissions/removal from land use, land-use change and forestry. Source: OECD data extracted from databases of the OECD. \\portal.oecd.org@SSL\DavWWWRoot\eshare\env\pc\Deliverables\EPR\ENV-EPI-mgt\Mid-term and thematic reports\Biodiversity Conservation and Sustainable Use in Latin America NEW.docx, https://stats.oecd.org/index.aspx?queryid=60702#, https://data.oecd.org/

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Annex B. Actions taken on recommendations from the last EPR

POLICY-MAKING FRAMEWORK 1. More clearly distinguish the policy development and regulatory functions of

SEMARNAT for natural resource and ecosystem management (coastal zone management, forests and biodiversity – including marine and freshwater ecosystems) from the policy implementation functions of its deconcentrated agencies (such as issuing permits, processing EIA applications and enforcing compliance with legislation).

• The evolution of the regulatory framework in environmental policy between 2013 and 2017 has allowed for a gradual redistribution of institutional functions in the environmental sector, contributing to a more efficient policy management in different areas.

• The LGCC was approved in 2012, giving rise to the ENACC, 2013, which describes the strategic actions to guide climate change policy at the three levels of government and encourages co-responsibility with society. Likewise, INECC expanded its functions to contribute to the implementation of national climate policy. The PECC establishes the objectives, strategies, actions and goals to face climate change.

• The LFRA was issued in 2013, which included obligations for environmental compensation such as repair of damage caused or payment of fines.

• The Energy Reform was published in 2013 is looking forward to transform the national energy sector into an engine of economic growth to promote investment, technological development and the conformation of value chains Derived from Reform, the ASEA was created in 2014, is a multidisciplinary regulatory figure whose mission is to supervise industrial safety and environmental protection along the hydrocarbon value chain.

• The CAMeE was created by six entities in central México (Mexico State, Hidalgo, Morelos, Puebla, Tlaxcala and Mexico City) were included in the Air Quality Strategy to implement a regional policy

• .An agreement to create the Gendarmeria Misión Ambiental (Environmental Mission Gendarmerie) was signed in 2016 as a result of the collaboration between SEMARNAT and the National Security Commission. The objective of the Gendarmerie is to prevent crimes and administrative failures in environmental matters, as well as to safeguard peace and security in the federal NPAs.

• Regarding the Environmental Impact Assessments, 11 technical guides for the EIA were updated (2014), which make the evaluation process transparent. Likewise, the management process has been made more transparent and efficient through the creation of systems such as the Procedures Consultation System, the Geographic Information System for the EIA and the System for Income, Evaluation, and Resolution of Manifestations of Environmental Impact and Procedures, among others.

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• In 2015 the updating of the National Policy of Oceans and Coasts of Mexico was carried out, and is under review by the CIMARES.

2. Further strengthen environmental policy integration by: i) introducing strategic environmental assessment for sector programmes and state and municipal development plans; ii) incorporating environmental criteria in the evaluation of public policies by the National Evaluation Commission; iii) inviting other sector ministries to provide input to the formulation of federal environment programmes; and iv) pursuing environmental policy integration in state development plans.

• CONEVAL, as the body that regulates and co-ordinates the evaluation of social policy, has placed emphasis on environmental issues focusing in climate change.

• In 2016, CONEVAL carried out the first strategic evaluation of a program in the environmental sector: PROMARNAT 2013-18.

• Regarding the challenges identified, there is a need for environmental policy to be transversal, and the execution of the programs makes sense insofar as there is co-ordination and alignment of policies, programs and actions, because the above help on the prevention of environmental degradation.

• An Impact Assessment was carried out on the PES Program. The objective of this assessment was to determine the impact of the program to avoid deforestation, to improve social organisation and in the socioeconomic variables between 2010 and 2014.

• Another form of strengthening the culture of evaluation in our country was through the inclusion of a specific mandate in the LGCC.

• In 2017, the results of the Strategic Evaluation of the Transversal Annex of the Budget of Expenditures of the Federation in Climate Change as well as the results of the PECC 2014-18 were presented.

• The main findings included the identification of significant progress, as well as challenges, in terms of design and processes for their implementation. The need for monitoring, reporting and verification (MRV) mechanisms to provide greater traceability of the actions carried out within the framework of the PECC was emphasised, along with the necessity of a correct definition and traceability of the public budget for the implementation of climate policy

• The culmination of the legislative process will constitute the CONEVAL as an Autonomous Constitutional body and will redefine its faculties and scope is pending.

• It is essential to update the "Ley de Planeación" (Planning Law), which will be a decisive factor when defining terms of the national evaluation policy.

• It is expected that the development of the National Strategy for the implementation of the 2030 Agenda in Mexico will be a catalyst to strengthen the evaluation agenda and promote the inclusion of environmental criteria in a cross-cutting manner.

3. Strengthen public participation in environmental policy making by: i) extending the public participation strategy from the federal to other levels of government; ii) providing environmental information to the public in a way that can be better understood; iii) rationalising the system of consultative councils and providing them with sufficient resources to fulfil their role; and iv) providing appropriate responses to citizens’ enquiries

• The environmental sector, as pioneer in the institutionalisation of citizen participation, has adopted pertinent measures derived from this regulatory framework to expand the agenda of public participation in environmental policy; proof of this is the inclusion of citizen participation in PROMARNAT, as an objective from which different strategies and lines of action are derived, and the addition of a quantitative indicator of the Citizen Participation Index in the environmental sector.

• Participatory Environmental Monitoring Committees. Between 2013 and 2016 more than 2 000 Committees at a national level have been integrated, surpassing the sexennial goal that was originally set (1 800 Committees), by

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means of which the owners of natural resources as well as the civil society in general are involved in conservation of natural resources and ecosystems. The Committees are accredited and trained by PROFEPA.

• The inclusion of women in sustainable development strategies is fundamental to achieve the national and international objectives. Participation of women is promoted through the allocation of resources destined to the development of local productive projects that seek to reduce the gender gap in the environmental sector. The goal is to guarantee the access, use and conservation of natural resources by women, especially those of indigenous heritage and/or living in the rural sector.

• The PROMARNAT 2013-18, has an environmental governance section that states that timely access to sufficient and high quality environmental information should be promoted and facilitated, making use of modern information and communication technologies.

• In this context, one of the main actions has been the expansion of the Sistema Nacional de Información Ambiental y Recursos Naturales (National System of Environmental Information and Natural Resources, SNIARN) between 2013 and 2017. It has recently diversified its services by adding more and higher quality statistical and geographic information. For example, the set of green growth indicators within the Sistema Nacional de Indicadores Ambientales (National System of Environmental Indicators, SNIA) are constantly updated, which allow users to track the development of Mexico in its transition towards a greener economy.

4. Improve the efficiency of environment sector programs by: i) expanding results-based programming; ii) reforming the operational rules of federal environment programs to favour the development of “integrated packages” that exploit synergies among programs; and iii) evaluating the impact and cost-effectiveness of environment programs.

• Since 2013, the “Estructura Programatica” (Yearly budget framework) of the Environment and Natural Resources Sector has been gradually modified to avoid duplication of program actions, efforts, and to focus spending on compliance with national and sectorial objectives.

• During 2016, the environmental sector made a significant effort to evaluate the quality of the budget programs based on the results they deliver and thus promote a better allocation of resources. In this sense, SEMARNAT, in collaboration with CONEVAL, SHCP and ASF, evaluated the Matrix of Result Indicators (MIR) of their budgetary programs. As a result, the design and integration of the indicators of the MIR were modified to reflect the impact of the actions carried out within the programs.

• A process of fiscal consolidation was initiated in 2016. It involved the preparation of the 2016 Expenditure Budget with a Base Zero approach and the strengthening of a Results Based Federal Budget. As a result, the 2016 Yearly budget framework included a merge of programs or the re-sectorisation or elimination of budgetary programs in order to take advantage of complementarities and synergies, as well as avoid duplication in their objectives and scope.

• This fiscal strategy meant a 44.4% reduction of the budget programs of the environmental sector between 2012 and 2017, going from 72 to 32 programs.

• The budget allocated to the Environmental Sector has undergone significant reductions since 2015, which have impacted the coverage of some budgetary programs. The forestry sector was one of the most affected, going from a MXN 7 411.9 million budget in 2013 to a MXN 3 572.8 million budget in 2017 (both at 2015 constant pesos).

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• The use of synergies among federal programs is fundamental for a better targeting of resources and achievement results. In this sense, SEMARNAT has pushed initiatives such as the General Law of Sustainable Forest Development reform to combine environmental and agricultural programs to achieve food security and the sustainable use of natural resources. In this context, SEMARNAT and SAGARPA work to modify the operating rules of those programs.

Actions beyond the recommendation: • For the integration of the 2018 Expenditures Budget, an initial link was made between the budget programs of the

sector and their potential contribution (direct and indirect) to some goals of the SDGs. This will enable the visualisation of the contribution of all the budgetary programs to each of the goals of the SDGs and, consequently, identify those that are not addressed. This to take advantage of synergies and avoid duplicities.

5. Strengthen environmental policy implementation by: i) fully implementing the requirements of the environmental impact assessment system to include cumulative impacts, and ensuring that simplification of procedures does not result in weakened requirements; ii) targeting enforcement programmes on activities with the greatest risk; and iii) strengthening the human and financial resources for environmental enforcement and compliance.

• The consideration of accumulated environmental impacts is maintained within the requirements of the Environmental Impact Manifestations (MIA), established both in the LGEEPA and in the Environmental Impact Guidelines which were updated between 2013 and 2016. Although, even though there is a normative basis for its consideration, in practice it is very difficult to know the degree of accumulation of the impacts produced by projects of specific development.

• Regarding the simplification of procedures, as of 2014 the guidelines for the elaboration of the MIAs were updated in their regional and particular categories, and the information requirements for aspects related climate change adaptation and mitigation were incorporated.

• The creation of the ASEA also contributed to strengthen the institutional setting in terms of environmental impact assessment. The Environmental Impact Assessment Regulation (REIA) of the LGEEPA was reformed in 2014, leaving in the Agency's faculty all the issues of hydrocarbons. Also within the power of this new agency are the environmental impact assessment for projects related to the hydrocarbons value chain and with changes in land use in forest lands.

• In order to make the EIA procedure more efficient, the development of The Electronic Management System of the MIA (MIA-e) was started in 2015. In 2017, the development phase was concluded and the "System for the Entry, Evaluation, and Resolution of Environmental Impact Manifestations and derivative procedures in electronic form" was officially launched. This new system seeks efficiency in time and costs for both institution and promoters.

6. Reduce environmental sustainability gaps between states, and support the development of more effective and long-term environment plans in states and municipalities by :i) earmarking additional budgetary resources for those states where capacity deficits impede the development and implementation of environment plans; and ii) expand the Environment Institution Development Programme

• All federal states have entities responsible for directly addressing issues related to environmental policy. In 28 states, these bodies have the rank of Ministries. Two states have Ecology Institutes, one state has an Institute for the Environment and Sustainable Development, and one state has a Commission for Ecology and Sustainable Development. In 18 states, the institutional arrangement is complemented by the State Attorney's Offices. The creation of these institutions represents a significant advance with respect to the findings of the EDA 2013, as Mexico grew from having 25 states with a governmental structure for environmental issues, to having institutions in all 32 states.

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• The national policy on climate change has reached the states that currently include the preparation of GHG Emissions Inventories. Up until 2017, 13 inventories have been completed and 18 states already have a Climate Change Program. In legislative terms, the publication of environmental protection laws has been achieved in eight states. Furthermore, there are 20 state laws on climate change.

• Strategies for the Conservation and Sustainable Use of Biodiversity have been developed in eleven states. • In the 2013-15 period, specific institutional strengthening projects in the federal states were supported with

budgetary earmarked resources by the Congress, through different Annexes of the Federal Expenditure Budget (PEF).

• The annual average of resources dedicated to these institutional strengthening projects was MXN 1 500 million, which were allocated towards the development of State Environmental Programs, Climate Change Programs, strengthening of the State Environmental State Attorney Offices, Municipal Land Use Planning Programs, Municipal Waste and Reforestation, among others.

• Additionally SEMARNAT supported specific institutional support for projects through the Environmental Institutional Development Program (PDIA) in the 2013-15 period, with MXN 192 599.6 million. Due to the changes of the Yearly Federal Budget of the 2016 PEF, the PDIA was eliminated as it was considered that it had reached the results and its operation cycle. This decision was based on the objectives that gave rise to it and on the strengthening level of local capacities in terms of environmental regulation for the decentralisation of functions.

• Currently, the allocation of resources to strengthen the institutions in the states is decided by the SHCP. Some mechanisms of allocation to the federal entities prevail, such as the General Branch 33 on Federal Contributions for Federative Entities and Municipalities.

Beyond the recommendation: • It has been identified that the Instituto Nacional para el Federalismo y Desarrollo Municipal (National Institute for

Federalism and Municipal Development, INAFED) of the Ministry of the Interior (SEGOB) has included management (40) and environment related performance (55) indicators in the Municipal Development Agenda (55). With this the environmental agenda in Municipal planning has been driven forward.

TOWARDS GREEN GROWTH 1. Gradually replace the diesel and petrol price-smoothing mechanism with an excise

tax on transport fuels; introduce excise duties on other energy products; differentiate the excise tax rates to reflect the environmental externalities associated with the use of these products, including their contributions to greenhouse gas (GHG) emissions and local air pollution; where needed, provide social transfers for those adversely affected by increased energy prices.

• In 2012, the government decide to phase out gradually the subsidies for gasoline, diesel, and liquefied petroleum gas (LPG). As a result, by 2013 fuel subsidies had fallen in real terms to their lowest levels in a decade, and in 2014, Mexico was able to cross the threshold to positive taxes. In 2015, these prices were transformed into maximum prices, preparing for the opening of imports of private fuels.

• In 2016, it was established that the maximum prices should follow a predetermined formula. The prices of these fuels were determined under market conditions by December 2017.

• Excise taxes on the consumption of fossil fuels were established in 2013. These taxes are based on the carbon

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content of the fuels and they are considered a “carbon tax”. This is a new policy instrument, nonetheless, taxes on these fuels are low, especially when compared to the rates that were proposed in 2013. This situation represents an opportunity to review it.

2. Restructure vehicle taxes to take account of vehicles’ environmental performance, including emissions of GHGs and local air pollutants; ensure that the vehicle ownership tax is applied in all states; reduce perverse incentives for vehicle use by removing tax credits for fuel use and road tolls, and by reforming the tax treatment of company cars and parking spaces.

• Most of the consumers that buy or import new vehicles in Mexico must pay the Tax on New Vehicles (ISAN). This tax is tied to the price of the vehicle, and not necessarily to environmental performance. Although there is a statistically-significance positive correlation between tax rate and environmental performance measured in terms of CO2e emissions. It is important to mention that electric and hybrid cars do not pay ISAN, where the good environmental performance of these cars is reflected by a zero-tax rate.

• Currently, the relationship between emissions and ISAN tax rate by brand and model of vehicles is being analysed in SEMARNAT. Although there are no final conclusions yet, the following figure shows the preliminary results.

Figure A B.1. Relationship between CO2 emissions and ISAN

• The purpose of the figure is to measure the efficiency of the ISAN structure in terms of environmental performance.

To do so, emissions by vehicle brand and the corresponding ISAN tax is compared. Each dot on the figure represents a type of car. The horizontal axis represents the emission level of CO2 (CO2 grams per kilometre) and the vertical axis represents the payment of the ISAN tax associated with the brand. The size of the dots represents the number of vehicles sold in the last year (big dots show brands that were very successful during 2016).

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• Even though the ISAN tax does not perfectly match the environmental performance of vehicles, there is a positive correlation between CO2 emissions per kilometre and the value of the tax.

• Although ISAN is based on price, it is not applied to all automobiles. Electric and hybrid cars do not pay the tax. In these cases, the absence of ISAN tax reflects good environmental performance. So the progress on this recommendation only reflects in the higher environmental performance it is needed to develop to other levels of performance.

• The vehicle ownership tax in Mexico targets drivers that are registered as owners of motor vehicles. The tax rate does not reach the whole country, since each State defines its application individually.

• Only Nuevo Leon and Oaxaca applied the vehicle ownership tax during 2017. Meanwhile, Baja California, Tamaulipas, Veracruz, Guerrero, la Ciudad de México, Querétaro, Hidalgo, Tlaxcala and the State of México apply it with partial subsidies. The rest of the country does not charge this tax.

• However, there was a setback in this policy due to the fact that the local governments decided to remove the tax. The total or partial discounts generates a disincentive to change a car for a car with better environmental performance. There is an opportunity to make a positive synergy with policy instruments such as standards and taxes.

• In terms of construction the newest reform that regulates the buildings located in Mexico City establishes a limit on the maximum number of parking spots per building. The maximum number of parking spots is determined by the area or region where the building will be located. The developers are not obliged to build a minimum of parking spots, but they must comply with the maximum number of spots. If the developers build more spots than allowed, they must pay taxes to the mobility fund.

• The tax credits for fuel use and road tolls represent a major opportunity area. 3. Regularly assess the environmental, social and economic impacts of existing and

proposed direct and indirect subsidies in an integrated way, with a view to improving transparency and identifying trade-offs and subsidies that could be removed, reduced or redesigned; replace perverse subsidies to energy use, agriculture and fisheries with targeted cash transfers to low-income households and small farmers (e.g. building on the “Oportunidades” programme).

• According to the Mexican G20 self-report (2017), the exemption of diesel and gas taxes on fishermen and farmers is regulated by the Ley de Energía para el Campo (Law of Energy for the countryside); this Law establishes that these two types of economic agents shall be subject to economic stimuli on energy and fuel prices.

• This type of exemption on fuels has been implemented through different taxation tools (G20, 2017). The National Commission for Aquaculture and Fishing (CONAPESCA) used a specific budget for the transfers of fixed subsidies on the fuel consumption per litre for registered fishermen. Furthermore, the Secretary of Agriculture, Livestock Farming and Rural Development (SAGARPA) has offered reduced tax rates for registered farmers on gas and diesel prices in 2011-13, and in 2017.

• The environmental impact of these subsidies has not been properly evaluated. Nonetheless, the World Wide Fund presented several case studies and consultancy projects that diagnose the fishing sector and its subsidy structure. Among their conclusion, the following needs that must be attended are underlined: subsidy placement must be transparent; investments should be reorganised to improve fishery management; tax reforms should promote fishing technologies that area eco-friendly, among others.

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• Regarding the agricultural water pumping subsidy, known as tariff 09, several environmental, social and economic impact studie

• s have been conducted: • The Mario Molina Centre identified in a 2014 study that tariffs 9-CU and 9 N promote overexploitation of water, and

the subsidy benefits the richest farmers. In response to this study, the Centre proposed a tax reform to raise the energy tax rates for water pumping in rural areas that are located above an overexploited aquifer.

• In 2015 The Federal Commission of Economic Competition (COFECE) reported in the conditions of competition in the agri-food sector. In total, 27 programs or sub-programs funded by Federal budget were analysed. The 9-CU and 9N tariff as well as the Commercialization and Market Development program operated by the Agencia de Servicios a la Comercialización Y Desarrollo de Mercados Agropecuarios (Agency of Services for Commercialization and Market Development, ASERCA) were identified as the biggest threat to economic competition, also affecting household consumption.

• Antón, Boyd, Elizondo and Ibarrarán (2016) published the research paper “Universal social insurance for Mexico: Modelling of a financing scheme”. The paper uses a computable general equilibrium model to evaluate the effects of the following scenarios: reduction of energetic subsidies and the granting of social transfers of fixed sums for people from different income levels; and the procurement of universal social insurance. The authors conclude that a wiser policy would be using alternative ways to assign resources allocated to energetic subsidies.

• The Centro de Estudios de Finanzas Públicas (Center of Public Finance Studies, CEFP) published in 2017 the “Incentivos a las energías renovables: una alternativa de ahorro para el Presupuesto del Gobierno Federal” (Incentives to renewable energies: a savings alternative for the Federal Government budget) document, which diagnoses the distortions generated by subsidies to energy tariffs. This document also includes a financial and budgetary evaluation of a subsidy to renewable energy policy, as well as generating recommendations for the impetus of technologies of this kind.

• The two non-subsidised electricity rates (tariffs) applied to agricultural users (9-CU and 9 N) were redefined by CRE in November 2017 as the cost-recovery Riego Agrícola de Baja Tensión (RABT) (low voltage) and Riego Agrícola de Alta Tensión (RAAT) (high voltage). This reform, despite reducing prices for electricity consumption beyond the subsidised quota, might open the opportunity for subsidy decoupling, as it would make forgoing the price subsidy in exchange for a direct transfer less costly. SAGARPA, SHCP and FIRA are designing pilot projects where farmers can give up a share of their energy quota in order to obtain an equivalent subsidy tied to efficient irrigation technologies. A similar pilot project is being conducted by SENER, FIRCO, SEMARNAT in the State of Sonora.

4. Building on the 2030Water Agenda and the OECD-Mexico water dialogue, develop a strategic financing plan for the water supply and sanitation sector, based on a projection of the medium-term public expenditure required and a gradual introduction of pricing based on sustainable cost recovery; implement the

• The 2030 Water Agenda was not conceived as a set of programs or measures that CONAGUA had to implement, but as a result of a far reaching collective effort to identify and classify the necessary changes of the National System of Water Management to achieve sustainability. In this regard, the vision and principles established in the Agenda were taken as a guiding reference to prepare the National Hydric Program 2014-18 (PNH). Both

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proposed policy and institutional reforms; identify ways to ensure that even the poorest people have adequate access to water services.

documents put forward the importance of reaching sustainable water use and the need to recognise that a deep transformation within the water sector is required. The importance of changing the traditional approach to water is also highlighted. This resource should not be treated as if it were infinite, but as a scarce and costly one that must be managed responsibly.

• One of the main conclusions of the OECD-Mexico Water Dialogues is that, even though there is no formal Action Plan with an integrated government overview, the PNH as a “special” program, permeates a transversal approach to hydric policies, and, for the first time, includes the participation of different agencies and government levels in order to work together towards their goal.

• The proposed change of legislation in the PNH, that implies the creation of a Ley General de Aguas Nacionales (General Law on National Water), and which currently under revision by Congress, covers the OECD Water Dialogue’s recommendations. The General Law’s proposal includes a list of joint functions and specific attributions for the three levels of government, in accordance to their constitutional jurisdiction. Paying particular attention to the matter of public regulation and provision of drinking water, drainage and sewage systems, as well as the treatment and management of residual water. The co-ordination between government levels regarding compliance with the human rights to water, culture, education, water science and technology and global water change adaptation and mitigation, among other, is also specified.

• Other relevant institutional changes are: water topics were incorporated into the PECC2014-18. The Energy Reform signalised the end of subsidies on fossil fuels, something that will have incidence on specific assistance programs of water use in the agriculture sector.

• The PNH recognises the necessity of an integral reform in the Mexican water sector along with the implementation of the modernisation of water processes. This program proposes reforms to the hydric sector in terms of legislative and institutional framework, management of human resource and financial systems and hydric planning.

• In order to address the goals established in the 2030 Water Agenda (clean rivers, watersheds in equilibrium, universal access to drinkable water, a sewer system, and safe localities with respect to catastrophic floods), an annual investment of MXN 1 024 thousand million for 20 years is required. This investment level is equivalent to an annual budget of MXN 51 000 million for CONAGUA. There was a positive trend of CONAGUA’s budget between 2011 and 2014, reaching a peak of almost MXN 50 000 million in 2014. However, after that peak the budget dropped.

• Even though CONAGUA does not have a Strategic Plan for formal financing, it annually prioritises projects for the drinking water and sanitation sectors so they can be incorporated into the Planning Mechanism of Programs and Investment Projects. This plan is a component of the Federal Egress Budget, in which projects are set with national and sectorial priorities.

• It is important to mention that CONAGUA’s budget depends upon SCHP budget allocation, and in 2015 the budget of the whole environmental sector was cut down. It would be ideal to have a sustainable financing system that could be more independent of the federal budget.

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• Given the budgetary limitations, an alternative approach that relies on the establishment of water related PPPs is being pursued. CONAGUA (2017) is currently considering 11 projects of this nature which represent a private contribution of MXN 9 000 million. Another 11 PPPs have been identified that could be open for bidding in 2018.

• The General Law on National Water establishes that the characteristics which lead to a self-sufficient, operative, financial and sustainable state and municipal provider must be outlined. It also defines the basis and principles for establishment of tariffs, in such a way that those in charge of their establishment have a framework that fosters financial sustainability.

• Even though water extraction, operation and utilisation prices have not increased at the same rate as inflation, the prices available over and underground water areas have been redefined which translates into higher costs per cubic meter for low availability areas. Differentiating of water tariffs, with water used for commercial and industrial purposes being more costly than that used for domestic purposes. Tariffs have also been established by incremental sets, where cost is calculated in function of the volume consumed, in other words, higher water consumption is associated to a higher cost per cubic meter. In addition, at least 28 federal states have disaggregated the concepts that were originally included in water costs in order for prices of services to be more transparent to the consumers. These are for: drinking water, sewer and sanitation systems. The difference between the amount of water billed and the money collected is still an issue at a National level. In Mexico City the tariff structure has a cost redistribution mechanism by means of “crossed subsidies”, where low-income users are assigned lower tariffs.

• Definition of poverty in terms of water access. According to CONEVAL, between 2012 and 2016 the levels of poverty, extreme poverty and percentage of people with a shortage of at least one basic service within the household have dropped. Two determinants of these basic services are: i) if water is obtained from a well, river, lake, stream, pipe, or transferred from another household or a public take, ii) if there is no sewage system or the drainage is connected to a river, lake, ravine and crevice, or to the sea.

• CONAGUA has had significant advances towards reducing water related shortages. It is estimated that the 2018 goal for drinking water and sewage coverage, both rural and urban will be met. It has also instrumented the PROCAPTAR program, which purpose is to attend localities were technical and economic difficulties in providing water still exist, by equipping them with rainwater storage systems and household residual water treatment technologies. Two other entities participating in this program are the SEDATU and CID. The first with the Promotion of Rural Urbanisation Program that focuses on localities in rural areas in with less than 2 500 inhabitants with a high or very high degree of social underdevelopment within farming settlements, as well as with the equipment of infrastructure for the construction, extension, betterment or rehabilitation of the drinking water system. The CDI developed the basic infrastructure program for the indigenous people, by means of which the people of indigenous localities are provided with drinking water and sanitation, among other services.

• According to the OECDs report “Hacia un México más fuerte e incluyente. Avances y desafíos de las reformas” (Towards a stronger and more inclusive Mexico. Challenges and improvements of structural reforms, 2017), Mexico

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still needs to promote the efficient use of water in different sectors, allocate it to where it creates higher value and where it is most needed, as well as stimulate investment on hydraulic infrastructure. The OECD urges Mexico to attend its governance challenges on multiple levels, in order to circumvent disparity between federal and watershed priorities and fortify the functions, capabilities, prerogatives and autonomy of the watershed council, as well as to establish good-practice sharing platforms.

5. Extend the waste charging system; develop a sound waste management system that includes the participation of workers currently part of the informal waste sector; promote and monitor the performance of PPPs in waste management.

• In 2013 there were only seven cities that charged for household waste collection in Mexico, among them Aguaprieta, Mérida, Puebla and Tehuacán. In 2017, at least 20 municipalities charge for the waste collection service.

• In this issue, Mexico City has a Solid Waste Law and its corresponding Regulations. The Comprehensive Solid Waste Management Program for Mexico City was published in 2016 and seeks to strengthen institutional co-ordination between centralised agencies and political delegations, to achieve compliance with the environmental policy on solid waste. This program is also the first example of integration of informal workers in the urban solid waste management process

• The Danone Corporation’s “Proyecto Pepenadores” program is one of the most representative examples of private industry working with informal workers. The aim of this project is to take these collectors out of garbage dumps and provide them with proper working conditions in for transference and recycling centre. As part of the program housing, sanitation, social care, health care, psychological care and education opportunities are provided. At least 400 collectors work in the Mexicali station; where, on average, 2 000 tons of polyethylene terephthalate (PET) are reused in Danone’s bottles and packages.

• In fiscal terms, facilities for people engaged in recycling have been established in the Federal Tax Code since 2014. This Code establishes that the Tax Administration Service (SAT) must implement a scheme to facilitate the verification for tax purposes for individuals and corporations that acquire waste and materials from the recycling industry.

• PPPs focused on the management of solid waste in municipalities that have limited financial resources, this allows authorities to move from being service providers to facilitators, focusing their activity on planning and supervision (Almeyda, no date).

• National and international institutions have promoted financing of waste management projects thorough PPPs. SEMARNAT has successfully co-ordinated these projects with BANOBRAS, BDAN, BM, BID and KFW. The institutions that can utilise the energy produced by urban solid waste and special management waste are SEMARNAT, SENER, SEDATU and CONACYT. The development banks such as, BANOBRAS, NAFIN and BANCOMEXT are financial sources of these projects. In the PPP framework the following projects have been promoted by BANOBRAS and other institutions:

• Integral Waste Management Project, Tuxtla Gutiérrez (Chiapas), which consists in the collection, transference, storage and final disposal of waste through the construction and operation of a landfill.

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• Puebla Waste to Fuel Project, Puebla, that considered the financial assessment of an ethanol generation project based on the use of urban solid waste.

• Biogas, a SIMPRODE system, Salinas Victoria (N.L.), which considers an energy production plant that uses waste from the Monterrey metropolitan area.

• Solid Waste Integral Services, Coacalco de Berriozabal (State of Mexico), consists in giving licenses for the public provision of cleaning services (collection, transference, processing and final disposal of urban solid waste).

• Waste-to-heat Power Plant, Mexico City, with the use of urban solid waste. 6. Strengthen innovation capacity, including by greater support for higher education,

international co-operation in science and technology and PPPs; strengthen the capacity to absorb and adapt cleaner technology, particularly in small and medium-sized enterprises.

• CONACYT (2017) launched the 2018 Program of Incentives for Innovation (Programa de Estímulos a la Innovación) its objective is to set the appropriate incentives for firms to finance research and technological development at the national level. The program has three different categories: micro-, small- and medium-sized firms; large companies; and projects with a connection to higher education institutions.

• In particular, an alignment with economical priority sectors based on the 2013 North American Industry Classification System is sought. Priority sectors in each federal state are defined yearly by CONACYT. During 2017 the “Professional, scientific, and technical services” were prioritised in 24 states “Generation, transmission and distribution of electricity” in 13 states, “Agriculture” in 11 states, “Services related to agricultural and forestry activities” in 5 states, “Waste management and remediation and clean-up services” in 3 states, “Services related to transportation” in 3 states, “Forestry” in 2 states, “Wood industry” in 1 state, and “Fishing, hunting and gathering” in 1 state.

• The FINNOVA launched a program to promote innovation, where bonds are given though the Office of Knowledge Transfer with the finality of creating appropriate incentives for innovation and for the links between corporations and academia. Stimuli are offered in particular to corporations with innovative solutions created by knowledge generating institutions, and to certified Knowledge Transfer Offices with knowledge transfer and private sector link ordinances.

• CONACYT’s 2013-17 accumulated budget on “Science, Technology and Innovation” rose to MXN 409 563.3 million, which represents an increase of 39.3% with respect to the 2007-11 period. In terms of GDP the annual average increased by 0.45% in terms of GDP, which is 0.08 higher with respect to the 2007-11 period.

• CONACYT launched the Programa Cátedras (Academic Chairs program) for young researchers. It is estimated that the 2014-17 accumulated budget for this program rose to MXN 2 830 million, and that 1 296 scholars from 828 higher education institutes and centres in the 32 federal states were incorporated. The topics with the highest degree of participation will be: technological development (290 scholars); environment (155 scholars); health (154 scholars); sustainable development (145 scholars).

• The Sectorial Environmental Research Fund has been created by CONACYT and SEMARNAT to support the needs of the environmental sector, focusing on applied, technological and innovative scientific research. The fund has a Technical and Administrative Committee where public officials from SEMARNAT and CONACYT participate

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alongside with representatives from academic and private sectors such as investigation centres, laboratories, private and public companies, among others dedicated to scientific research and technological development and innovation registered with the National Registry of Institutions and Scientific and Technological Firms (RENIECYT). Funding is allocated according to particular “demands” that arise from the priorities defined in the Special Program of Sciences, Technology and Innovation (2014-18) as well as from the Sector Program of Environment and Natural Resources 2013-18 (DOF 12-12-2013). For example, the following demands were added in 2005: Promotion for innovation and technological development as a detonator of sustainable production and consumption patterns; Economic valuation of ecosystem services; Social and ecosystem vulnerability in the presence of climate change; Territorial and environmental management and urban areas in the periphery (CONACYT-SEMARNAT, 2015).

7. Develop a strategy for development co-operation focusing on areas where Mexico has expertise, such as forestry, biodiversity and climate change; speed up the development of the Mexican Information System on International Co-operation for Development in line with international methodology and guidelines.

• The Agencia Mexicana de Cooperación Internacional para el Desarrollo (Mexican Agency for International Cooperation on Development Issues, AMEXCID) establishes co-ordination processes, creates tools and planning instruments for co-operation, and keeps track of and assesses co-operation. This Agency is supported by the Programa Internacional para el Desarrollo (International Cooperation for Development Program, PROCID) 2014-18, which establishes the base for the planning and implementation of international co-operation. Particularly, PROCID also seeks to enhance and promote international co-operation in strategic regions, keep relevant relationships to attract resources and capabilities, and increase Mexico’s diplomatic stand on the international level (AMEXCID, 2016).

• AMEXCID launched the Technological Platform for the Registro Nacional de Cooperación Internacional para el Desarrollo (National Registry of International Cooperation for Development, RENCID). This Platform is a structure of support for planning and application processes related to international co-operation.

• The following table shows the amount offered by Mexico in US dollars:

Table A B.1. International co-operation

Topic Amount (USD) % Contributions to international organisations 153 461 665 74.11 Scholarships 23 584 430 11.39 Financial co-operation 14 475 145 6.99 AMEXCID procedures/operations 7 085 129 3.42 Humanitarian aid 363 342 0.18 Supply of technical co-operation 8 091 980 3.91 Total 207 061 693.21 100

Source: AMEXCID official site.

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• The following table shows the international co-operation projects during the period 2013-17 where Mexico has participated as a supplier:

Table A B.2. Co-operation offered by Mexico

Receiver country

Category Description

Trinidad and Tobago

Information systems

Development of capacities to build an information system on biodiversity.

South Korea Information systems

Collaborative platform of vulnerability and adaptation to climate change and air quality for Latin-America and the Caribbean.

Malawi - Netherlands

Hydric resources

Risk management for floods in Malawi.

Ecuador Hydric resources

Support to the integral management of hydric resources on Ecuadorian watersheds.

Salvador Hydric resources

Planning of hydric resource capacity vs demand.

Germany Contaminated sites

Strengthening of the Integral Management System of contaminated sites.

Salvador Contaminated sites

Technical co-operation program for the strengthening of capacities for monitoring, protocols and alerts related to air contamination in Salvador.

Germany - Bolivia

Waste Reuse of treated wastewater for agricultural irrigation.

Panama - Japan

Waste Establishment of waste management plan with focus on the “3 Rs” (reduce, reuse and recycle) in Panama.

Honduras Forestry Strengthening and institutional development of the Institute of Forest Conservation on management and sustainable forest conservation topics.

8. Continue to promote integration of environmental and trade policies, including by enhancing co-operation to address environmental issues in the northern border region; reinforce efforts to assess the environmental impact of trade, including by involving the public.

• In the framework of the VI Annex from the International Agreement for the Prevention of Ship Pollutants (MARPOL Agreement), several technical reports were prepared. The following topics were analysed: atmospheric polluters, fuel costs and economic and health impacts. These reports helped define an Emission Control Area (ECA) for ships in the North America region (CEC, 2015). The initiative is still in the internal revision and has to be sent it to the Senate to continue with this process of approval.

• A PPP project, in which the basis for a public-private alliance regarding the production of buses and heavy-duty trucks in North America, was launched. In the framework of this project a forum for the implementation of new

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technologies and adoption of best practices on transportation was held to support this partnership. In this forum past tendencies were analysed and baseline parameters were revised to improve the environmental performance of the transportation sector (CEC, 2015).

• In terms of waste management in North America, the capacity to prevent illegal trade of environmentally regulated products such as electronic and hazardous waste, and substances that damage the ozone layer was improved with a project that consisted of closing legal loopholes, improving information exchange, and increasing intelligence surveillance (CEC, 2015).

• Mexico reduced the tariffs on the imports of the goods regulated by the “List of environmental goods from the Asia-Pacific Economic Cooperation (APEC)” on January 6, 2016, by changing the tariffs in the General Law on Tariffs to Imports and Exports (Ley de Impuestos Generales de Importación y Exportación). The tariffs of goods that were modified is on the DOF: http://www.dof.gob.mx/nota_detalle.php?%20codigo=5422212&fecha=06/01/2016. This commitment arose from the 20th Meeting of APEC Leaders held on September 2012, where leaders signed a declaration to make a 5% reduction on the tariffs of these goods (www.apec.org/Meeting-Papers/Leaders-Declarations/2012/2012_aelm).

• The commitment considers the economic circumstances of all countries regardless of their position in the International Organization of Commerce. The listed environmental goods include all that directly or indirectly promote green growth and sustainable development (Annex C of the list of environmental goods: www.apec.org/meeting-papers/leaders-declarations/2012/2012_aelm/2012_aelm_annexc.aspx).

• Currently, Mexico is negotiating the environmental chapters on the North American Free Trade Agreement and on the Trans-Pacific Partnership (TLCAN/TPP), and the sustainable development chapters on the Free Trade Agreement between Mexico and the European Union (TLCUEM). In this context the importance of promoting environmental and commercial policies that support each other is recognised.

• The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) reflects the arrangement between 11 countries after USA decided to leave the TPP. Given the importance of the Agreement, these countries agreed to maintain the achieved access level to markets and to exclude the agreements made by the USA. The environmental chapter on TPP is available on www.gob.mx/tpp.

• The Federal Government has declared that by participating in the CPTPP Mexico can participate in the design of avant-garde regulations that can become a worldwide reference for commerce. The goal is to consolidate the leadership position that Mexico maintained from previous TPP. Recent structural reforms have created better conditions to benefit from these Agreements. The APEC Leaders Meeting was held on 10 November 2017 in Da Nang, Vietnam, where the Ministers of the APEC countries endorsed the legal instruments that will allow the CPTPP to come into effect.

CLIMATE CHANGE 1. Take all necessary measures to implement the General Law on Climate Change;

clarify the domestic emission reduction target and define an indicative allocation among sectors; identify least-cost ways to achieve the target within sectors and in

• From 2012 to 2014 the LGCC, ENACC and the PECC represent the pillars of Mexico’s National Climate Change Policy.

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general; ensure that targets and measures are adjusted on the basis of systematic, regular and independent assessments of progress; publish annual progress reports, and a GHG emission inventory at least every two years.

• Mexico presented the NDC measures at the COP-21 in December 2015. The NDC defines the actions that the country will carry out during the period 2020-30 to contribute to the objective of the international community to reduce emissions of GHG. According to the NDC this country established a goal of: 22% reduction of GHG and 51% reduction of SLCP.

• The INECC conducted a cost benefit analysis of 8 economic sectors. Its goal was to identify the most efficient and cost-effective technical pathway for compliance with the NDC that will be published in 2018.

• In 2016, Mexico ratifies the Paris Agreement and it came into force on November 4th of the same year. During COP-22, Mexico´s Mid-Century Strategy was presented, which reiterates its climate change commitments.

• Mexico has submitted 5 National Communications and a First Biennial Update Report to the UNFCCC. In 2018, Mexico is expected to present the 6th National Communication and the Second Biennial Update Report to the UNFCCC.

• In December 2017, the Congress approved reforms to the LGCC to incorporate the Paris Agreement commitments and a mandatory carbon market. The publication of the carbon market bases is expected during the first semester of 2018.

• As an economic instrument on 2014 a carbon tax was established in the Special Tax Law on Production and Services, IEPS, where depending on the total carbon content, fuels are charged at different rates.

• The REDD+ Strategy was approved by the CICC which is important for the compliance of mitigation commitments. • As a financial instrument, it was highlighted the creation of the FCC, which is responsible for channelling public and

private financial resources to support the implementation of actions and projects to address climate change. • In 2018, the ENACC will be updated to incorporate new international commitments (such as the NDC); the

development of new scientific knowledge or relevant technologies; relevant policies on the environment, natural resources, economy, energy, sustainable transport and health.

• The National Emissions Registry (RENE) and its Regulations were created for the monitoring and compilation of information on the emission of Greenhouse Gases and Compounds (CyGEI) of the different productive sectors of the country. The RENE Regulations will be updated after the first three years of reporting emissions, with the objective of enabling the verification requirements and calendar to coincide or adhere to the carbon market process that will take place during 2018.

• The National System of Climate Change (SINACC) was established in 2014. This system arose from the need for co-ordination between federation, states and municipalities for the integration and operation of national climate change policy.

• Mexico has presented five National Communications to the UNFCCC, which aim to strengthen institutional capacities for the integration of climate change strategies within national priorities and comply with Mexico's obligations under the Convention Framework. The sixth National Communication is expected to be delivered by June 2018

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• The country has also submitted a First Biennial Update Report to the UNFCCC (BUR), which is an effort to update the information provided in the national communications for Non-Annex 1 Parties. The Second Biennial Update Report will be presented to the UNFCCC on 2018.

2. Consider re-establishing the PEMEX intra-company emission trading system, and gradually extend it to other large emitters, in parallel with the reform of energy subsidies and the establishment of a robust system for monitoring, reporting and verifying emission reductions; consider how it could be linked to similar systems in other countries.

• In 2012, the LGCC established the design and implementation of a voluntary carbon market in Mexico. In 2017, SEMARNAT and the Mexican Stock Exchange designed a market simulation exercise in which 60 national and international companies will participate voluntarily.

• Regarding the reform of fuel subsidies, their phasing out started in 2012. In 2013, fuel subsidies had fallen in real terms to their lowest levels in a decade, and in 2014, Mexico was able to cross the threshold to positive taxes. In 2015, these prices were transformed into maximum prices, preparing for the opening of imports of private fuels. In 2016, the Mexican Congress approved the legislation to further increase flexibility in gasoline and diesel prices, starting in 2017. On 1 January 2018, these prices will be determined under market conditions.

• Regarding international commitments, Mexico joined the Carbon Pricing Leadership Coalition initiative, which seeks the allocation of a carbon price and the correct understanding of this market after its implementation (WB, 2017).

• As one of the mandates of the LGCC, the RENE and its Regulations were created, which compile information on GHG emissions from productive sectors that are required to report their emissions exceeding 25 000 tCO2e (tons of CO2 equivalent). These sectors are: energy, industry, transport, agriculture, waste and trade and services (SEMARNAT, 2017).

• The reforms to the LGCC in 2017 established a mandatory carbon market. The publication of the market rules is expected during the first semester of 2018. These rules will receive inputs from studies carried out by experts in national and international carbon market issues. It is expected that a pilot program of the market will start during the second half of 2018.

• Mexico signed the Carbon Pricing in the Americas co-operative framework. The leaders presented their joint vision for regional co-operation on carbon pricing and pledge to collaborate to strengthen the monitoring, reporting and verification systems of GHG emissions with the ultimate goal of establishing the basis for linking carbon markets (SEMARNAT, 2017).

3. In conjunction with gradually removing energy subsidies, identify and implement more cost-effective approaches for further improving energy efficiency, such as reducing losses in electricity distribution and transmission, reducing gas flaring, promoting co-generation in large industries, establishing a mandatory energy efficiency standard for new buildings and providing targeted support to enhance the energy efficiency of existing buildings.

• One of the most significant improvements was the publication of the Energy Transition Law (Ley de Transición Energética) in December 2015. The objective of this law is to regulate the sustainable use of energy, obligations regarding clean energy and reducing polluting emissions from the electricity industry. Additionally, it establishes the roadmap to move towards a low carbon economy.

• Due to the modernisation of equipment and the improvement of operating practices, there was a reduction in losses in electricity distribution and transmission. The total energy losses in distribution in 2016 were 12.36%, representing a reduction of 7.5% over the previous year (CFE, 2016).

• As part of the mitigation goals proposed in the LGCC, minimum goals of the participation of clean energies in the generation of electricity was established.

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• The Green Mortgage Program gives credits to buy, build, expand or remodel a house with energy saving technologies, such as thermal insulations, solar heaters, among others.

• One of the most important instruments that will help to change the energy matrix are the Clean Energy Certificates (CEC). The aim of this CEC mechanism is to promote investment on new energy projects and give the right incentives for clean energy generators (SENER, 2016). Big consumers in the energy sector will have to show, through the acquisition of CECs, that a percentage of their energy consumption will come from clean sources. For 2019, the Ministry of Energy will establish percentages of clean energy consumption for firms and certain users. The CRE will manage the CEC will store all the data regarding production and consumption of energy, emissions, transactions among participants, and the verifications of clean energy liabilities. (More info: www.gob.mx/cre/articulos/preguntas-frecuentes-sobre-los-certificados-de-energias-limpias, www.gob.mx/sener/prensa/se-da-a-conocer-requisito-para-la-adquisicion-de-certificados-de-energias-limpias-en-2019)

• In terms of new buildings, CONUEE has two types of regulations related to energy efficiency: systems and products. There are 3 regulations on systems that handle public lighting for residential and non-residential buildings and their surroundings. There are 9 regulations on products that handle thermic insulation for industrial systems and buildings, air conditioners, self-ballasted fluorescent, light-emitting diode, general lamps and glass. (More info: www.gob.mx/conuee/acciones-y-programas/que-tipo-de-apoyo-brinda-la-conuee-en-materia-de-edificios-edificaciones?state=published)

• In terms of cogeneration, after the energy reform 14 different plants are working and produce 432 megawatts. These plants are mainly located in Veracruz (60%) and their production is directed to the chemical and petrochemical sectors (SENER, 2017). (SENER, 2017). (More info: www.gob.mx/sener/prensa/en-el-marco-de-la-reforma-energetica-nueva-planta-de-cogeneracion-electrica-en-veracruz?idiom=es).

4.Promote production and use of renewables, including by developing a sound methodology for valuing environmental and social costs of electricity production for use when purchasing electricity at least cost; developing a support system for renewables based on a careful assessment of potential, cost and benefits; establishing an independent mechanism to review and adjust objectives and the means of achieving them in light of market developments; and developing decentralised energy systems for renewables provision to rural communities.

• SENER designed a methodology for the valuation of externalities associated with the generation of electricity in Mexico. The use of this methodology by the CFE will allow the evaluation of the impact of electricity generation projects that have social, economic and environmental impacts, among others (DOF, 2012).

• In terms of the Social Impact Evaluation defined in the new energetic legislation allows to predict and anticipate these changes. The aim of these types of evaluations is to protect people by preventing, mitigating, or compensating social impacts by identifying them before the project starts. The right to participate in the decision making regarding energy projects is the main premise behind the social impact evaluation. (More info: www.cre.gob.mx/documento/6423.pptx).

• About the provision of electricity to poor areas, the Universal Electric Service Fund (FSUE) for Isolated Systems in 2017 aims to provide electricity to rural communities and marginalised urban areas (SENER, 2017).

5. Further develop sustainable urban transport systems by scaling up and rolling out investment in low-carbon mass transit and strengthening regional and local capacity for development of integrated transport and urban planning policies.

• In terms of sustainable urban transport systems, Mexico has implemented different programs and actions that seek to implement low-carbon public transport through the Programa Federal de Apoyo al Transporte Masivo (Federal

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Mass Transportation Support Program, PROTRAM) and the Fondo Nacional de Infraestructura (National Infrastructure Fund FONADIN).

• These instruments will promote the participation of the private sector in the development of urban transport projects through the support to carry out studies that help determine the technical and financial feasibility of the project, as well as support for the construction of terminals, transport equipment, among others (SHCP-BANOBRAS, 2016). The main projects in the PROTRAM portfolio are the authorisations of financial support for the bus rapid transit systems (BRT) in different states, such as Chihuahua, Mexicali, Monterrey, Puebla, Tijuana, among others.

• Regarding freight transportation, the Clean Transportation Program (Programa Transporte Limpio) aims to make this type of transport in Mexico efficient, competitive and environmentally friendly, through the adoption of best practices and technologies, such as training in operators, aerodynamics in tracks and trailers, automatic tire inflation, among others. Between September 2016 and June 2017, 52 companies joined the Program and more than 52 000 cargo transport vehicles were evaluated. During the same period, the reduction of 2 million tons of CO2 was accounted for using strategies and technologies that reduce fuel consumption (SEMARNAT, 2016).

• Actions to renovate public transport and facilitate urban mobility were established by SEMARNAT in January 2017, following the publication of the Economic Strengthening and Protection of the Family Economy Agreement (Acuerdo para el Fortalecimiento Económico y la Protección de la Economía Familiar). Since then, different projects have been promoted by CAMe, the FCC, NAFIN and the governments of Mexico City, the State of Mexico and Puebla. An example is to encourage the use of natural gas in public transportation.

6. Take further steps to reduce GHG emissions and local air pollutants from motorised transport, including by adopting vehicle fuel efficiency or CO2 emission standards, making vehicle inspection programs mandatory in all states and examining the potential role of indigenous biofuels as a transport fuel on the basis of a full life-cycle assessment of their environmental impacts.

• In 2013, the NOM 163 energy efficiency standard for light new vehicles was published. This standard regulates the average emissions allowed for these types of cars. A proposal to reform the standard will be discussed. This reform seeks to homologate according to the USA energy efficiency standard and to support the compliance of the climate change goals to 2025. In 2016, an update of the NOM was published to extend the application of the standard in year-2017 models and the same will be done for 2018.

• The reforms are being negotiated with the Asociación Mexicana de la Industria Automotriz (Mexican Association of the Automotive Industry, AMIA) and a discussion is taking place on the technical and economic differences that will allow to define whether harmonising our standards with the regulations of the EPA it is the best option.

• A significant progress has been made to improve the air quality in the main cities. In 2016 an emergency official standard was published due to the high levels of pollutants presented. The NOM-EM-167-SEMARNAT- 2016 establishes the levels of pollutant emission for the vehicles that circulate in Mexico City, Hidalgo, State of Mexico, Morelos, Puebla, and Tlaxcala (Megalopolis); as well as the test methods and specifications of the equipment used for the certification. Its application came into force through mandatory vehicle verification programs of local governments on July 1, 2016. The definitive standard NOM-167-SEMARNAT-2017 was published on May 18, 2017

• Thanks to the measures adopted by the Federal Government and Megalopolis Commission (CAMe), in spite of presenting atypical climatic conditions in the ozone season of 2017 (such high pressure system had not been seen

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in the last 20 years) ozone concentrations were well below 2016 levels. During 2016, there were 14 environmental contingencies due to ozone, while in 2017, only 2 episodes were presented.

7. Continue to show leadership, and to share experience, in international efforts to mitigate climate change, including by expanding the use of market mechanisms such as the CDM to reduce emissions from large energy-intensive industries and the waste and wastewater sectors, and developing a system for measuring, reporting and verification of GHG emissions and sinks.

• Mexico has been leadership in the Climate Change Arena joining to different initiatives: the 2030 Agenda, the Paris Agreement, the progress on the implementation of the NDC, the half century strategies, the analytical methodologies of the synergies between adaptation and mitigation, the carbon market development, the subnational actions, transparency and accountability, green growth, current co-operation, and future possibilities. For Mexico, the exchange of knowledge among countries should intensify, especially with respect to adaptation to ecosystems, risk reduction of disasters, early warning systems, circular economy and carbon markets (SEMARNAT, 2016).

• In terms of the Clean Development Mechanism (CDM) Mexico registered 203 projects in 2016 to the CDM Executive Board of UNFCCC; these projects represent a certificated reduction of 19 595 685 tCO2e (SEMARNAT, 2016). The following types of projects were registered by Mexico: waste (management of cattle waste, management of swine waste, landfills, treatment of wastewater), energy production (eolic, geothermic, solar, hydroelectric, etc.), use of energy (cogeneration, energetic efficiency, fuel substitution, etc.), among others (More info on www.semarnat.gob.mx/sites/default/files/documentos/programas/ informes/5_Informe_Labores_SEMARNAT.pdf, http://dgeiawf.semarnat.gob.mx:8080/ibi_apps/WFServlet?IBIF _ex=D3_AIRE02_07&IBIC_user=dgeia_mce&IBIC_pass=dgeia_mce).

• INECC with GIZ support a constructive dialogue (June 2016) about strengthening and improving the Mexican MRV. Preliminary results were presented, regarding the diagnosis of the national and sectoral MRV, the conceptual framework, and the future vision to improve the MRV mitigation, and climatic accountability (Ikki Alliance, 2016). Participants from SEMARNAT, SAGARPA, CONAFOR, INEGI and national consultants were gathered in the dialogue (Ikki Alliance, 2016).

• REDD+ Strategy also considers an MRV system. The REDD+ MRV system will be able to transparently estimate the emissions caused by deforestation and forest degradation by using satellite technology and field data (CONAFOR, 2017).

• The report “Best practice recommendations for MRV and accountability for Mexico” was completed in 2017. It includes an analysis for each country of key elements, existing gaps, best practices for MRV and relevant accountability. Three key elements that would be common among countries were identified: emissions of MRV, mitigation actions of MRV and financing of MRV. (SEMARNAT, 2016) (More info in www.semarnat.gob.mx/sites/default/files/documentos/programas/informes/5_Informe_Labores_ SEMARNAT.pdf, www.conafor.gob.mx/web/temas-forestales/bycc/acciones-de-preparacion-para-redd/ proyecto-de-fortalecimiento-redd-y-cooperacion-sur-sur/).

• In terms of mitigation actions by 2016, there were 28 actions registered in the National Registry of Nationally Appropriate Mitigation Actions, out of which, 15 are also registered in the UNFCCC. Mexico has supported some NAMA through the NAMA facility, which is the international facility that finances the execution of these types of projects (SEMARNAT, 2016).

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• The energy efficiency NAMA for small and medium-sized enterprises (SME) includes a subsidy system of small scale which may encourage private capital leverage for clean technologies. The sugar refineries in NAMA will increase the cogeneration investments. (More info in http://www.semarnat. gob.mx/sites/default/files/documentos/programas/informes/5_Informe_Labores_SEMARNAT.pdf).

• The following projects are registered in Mexico (INECC, 2016) www.nama-database.org/index.php/Mexico, www.gob.mx/inecc/ acciones-y-programas/acciones-nacionalmente-apropiadas-de-mitigacion-namas

8. Further develop and implement the climate adaptation strategy by involving all relevant sectors, subnational levels of government, business and civil society, for example by developing technical guidelines for sectors such as forestry; establish a robust, indicator based mechanism for monitoring and assessing progress in achieving objectives.

• The main instruments developed for guiding the national policy on adaptation to climate change at all levels in Mexico are the LGCC, ENACC and the PECC, that have the following objectives in terms of adaptation (DOF, 2012): reducing social and ecosystem vulnerability to the effects of climate change and strengthening the resilience and resistance of natural and human systems.

• To monitor the results of the objectives mentioned above SEMARNAT developed indicators for the PROMARNAT 2013-18: Percentage of progress in the development of instruments that contribute to reduce population and productive sectors vulnerability of climate change impacts; percentage of area with ecological territory planning or Urban Development Programs; Index of vulnerability reduction through infrastructure and actions for the conservation, restoration and sustainable management of natural capital; and Health Vulnerability Index, developed Social Vulnerability Index and agricultural vulnerability indexes. Mexico participates in the Cancun Adaptation Framework (CAF), which aims to improve adaptation measures. In this context, an Adaptation Fund was created to finance specific projects and programs where the Mexican Institute of Water Technology (IMTA) has been accredited by the Fund to function as a National Implementing Entity. (INECC, 2017).

• Other tools have been designed to implement adaptation policy measures and resource allocation for example: the National Atlas of Vulnerability to Climate Change (ANVCC), developed by the INECC and the Methodology for the Prioritization of Adaptation Measures against Climate Change carried out by SEMARNAT and the German Cooperation Agency.

• In terms of adaptation NDC, different goals and actions were established to be carried out in the period 2020-30, these are divided into three categories (INECC, 2015): a) Social sector: achieving the resilience of 50% of the most vulnerable municipalities in the country; b) adaptation based on ecosystems: reach the deforestation zero rate in 2030; c) strategic infrastructure and productive sectors: install early warning systems and risk management at the three levels of government.

• SEMARNAT has maintained the commitment for an Open Government on the issue of vulnerability and adaptation to climate change, an example is that in 2018 it is expected to consolidate a platform on adaptation for decision making as part of the SICC.

• In 2018, Mexico will start to work on the National Adaptation Program and in other tools for decision-making.

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Biodiversity and Forests 1. Update the 2000 National Biodiversity Strategy and Action Plan to reflect the 2011-20 Aichi

biodiversity targets and other measures agreed under the Convention on Biological Diversity in 2010; develop an action plan to achieve the target for protected areas that optimises the conservation of biodiversity and ecosystems, and provides adequate management and financial resources.

• In the context of COP13, Mexico presented the National Biodiversity Strategy (ENBioMex) and it's Action Plan 2016-30, which consider the commitments that Mexico stated at CBD regarding the Strategic Plan for Biological Diversity 2011-20 and the Aichi Goals and the 2030 Agenda. The update of the ENBioMex and the Plan represents an opportunity to integrate conservation and sustainable use of biodiversity criteria in to sectorial policies and programs.

• Mexico joined BIOFIN Initiative in 2015, in order to calculate the cost of implementing the strategy. The results show that for the conservation and restoration component an approximate amount of MXN 1 600 million per year up to 2020, will be required, which means that it requires greater investment compared to the other strategic components (UNDP-BIOFIN, 2017).

• In terms of the regulatory framework, in October 2017 a General Law on Biodiversity was presented to the Congress which sets the foundation for the establishment of integral public policies as well as for a legal and effective protection of biodiversity.

• The progress on conservation policy is outstanding. Between September 2016 and June 2017, the decrees of five NPAs were published As of June 2017, there was an accumulated total of 182 NPAs, covering a total area of 90 839 521.5 ha, of which 21,380,773.4 ha correspond to land and emerged island surface, and 69 458 748.1 ha to marine areas, representing 10.9% and 22.1% of national terrestrial and marine surface, respectively (SEMARNAT, 2017).

• Another achievement was that Mexico has met the Aichi Goal for marine surface protection (10%). The percentage of marine surface protection in Mexico is more than the double of the Aichi Goal percentage.

• In November 2017, Revillagigedo was declared a national marine park. This NPA covers a total of 14 million hectares. This declaration makes this park the largest in North America that restricts fishing activity.

• In response to Aichi Target 9 on invasive species, a List of Invasive Alien Species for Mexico was published in 2016. Further progress is still needed on strategic knowledge issues and pilot programs in protected areas to implement the National Strategy on Invasive Alien Species.

• CONABIO documented the contribution of the Mexican States to the Aichi goals. The results showed that there is a significant advance in the goals related to sustainable forestry, protected natural areas and genetic diversity. The goals regarding sustainable fisheries, sustainable agriculture, and aquaculture have to be review.

2. Establish a high-level inter-ministerial task force (similar to the one for climate change) to promote economically and environmentally sustainable use of ecosystems and biodiversity.

• One of the central issues during COP13 was mainstreaming biodiversity conservation and sustainable use in sectorial plans, programs and policies, with emphasis on the agricultural, forestry, fishery and tourism sectors. This integration is not an easy process, since it requires the commitment of the different

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productive sectors. Four strategies were developed for the agricultural, forestry, aquaculture, fishing and touristic sector where the SAGARPA, CONAPESCA, SECTUR, CONAFOR and CONABIO are involved.

• As a result of the High Level Segment at COP13, ministers and representatives of the environmental, agricultural, forestry, fishing and tourism sectors signed the Cancun Declaration that aims the Integration of Conservation and the Sustainable Use of Biodiversity. This document subscribes a roadmap towards the recognition and valuation of biodiversity in decision-making for sustainable development.

• SEMARNAT and SAGARPA signed a historic agreement to develop joint actions that prevent the land use change from forest areas to agricultural and livestock spaces. The agreement will secure that agricultural public policies will incorporate criteria for the conservation of biodiversity and its sustainable use. Furthermore, SAGARPA-CONAFOR signed a collaboration agreement to promote and facilitate the policies with a territorial approach that allows the integration and alignment of agricultural and forestry policies.

• CONABIO is formed by an Inter-Secretariat Commission to promote the sustainable use of ecosystems and biodiversity, as well as to generate valuable information to improve decision-making throughout the administration. However, there are several inter-ministerial commissions that have political influence on biodiversity issues: a) Intersecretarial Commission on Biosafety of Genetically Modified Organisms; b) Intersecretarial Commission for the Sustainable Management of Seas and Coasts (CIMARES); c) Intersecretarial Commission for Sustainable Rural Development and Inter-Secretarial Commission on Climate Change.

• The ENBIOMEX proposes the creation of an inter-institutional mechanism for the integration of biodiversity across the different sectors of Federal Government. In this sense, it highlights that the inter-ministerial commissions could have an important role for mainstreaming the conservation and sustainable use of biodiversity in to public policies of different sectors. (BIOFIN-2017).

• One of the main challenges is to add an office in charge of biodiversity issues in each of the Federal Ministries. These offices would contribute to the integration of conservation and sustainable use of biodiversity in sectorial plans, programs and policies.

3. Strengthen economic analysis of biodiversity to support implementation of more efficient and effective policies; complete the planned study of the economics of biodiversity; develop business-as-usual projections to identify future pressures on biodiversity.

• In 2015, SEMARNAT launched an Inter-Institutional Strategy to address the economic valuation of issues of ecosystems and environmental services. A working group was formed by environmental sector institutions leaded by SEMANRNAT that aims to strengthen the work related to the economic valuation of ecosystems by exchanging experiences in terms of economic valuation methodologies used, databases and institutional synergies, among others.

• The TEEB-Mexico Initiative, through the TEBB-AgriFood Project, seeks to develop an economic valuation of ecosystem and environmental services framework for the agricultural sector and how these

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services are affected by unsustainable agricultural practices. The study will also develop recommendations for public policies focused on mainstreaming the value of biodiversity and ecosystem services in decision making and agricultural practices in Mexico (TEBB, 2017).

• The Eco Value Mx Initiative, arises from the co-operation between the government of Mexico and the German government, to comply with international commitments that aimed preserving biodiversity and mitigating climate change (Ecovalor, 2017). Through the project, different economic valuation exercises of the ecosystem services in NPA have been carried out, in order to show the economic value of the environmental services offered by the NPA and contribute to the Mexican economy.

• Mexico accepted the invitation from the United Nations Statistics Division (UNSD), as well as The Program of Nations for the Environment (UNEP), to join to the initiative “The System of Environmental-Economic Accounting and Experimental Ecosystem Accounting (SEEA-EEA)” in 2013. It aims to measure ecosystems in physical and monetary units and Mexico is a country that will generate pilot cases.

• CONABIO leads an economic assessment initiative that seeks to ensure the genetic biodiversity conservation of traditional agroecosystems in Mexico. CONAFOR and INECC, is developing an economic assessment tool for forests and rainforest.

• Finally, the LFRA establishes the use of economic valuation to compensate for environmental damage through the equivalent habitat economic valuation methodology.

4. Review the efficiency and effectiveness of economic instruments for the conservation and sustainable use of biodiversity and forests; assess the feasibility of new instruments based on the polluter-pays principle.

• Payment for Environmental Services Program (PES): This program is an instrument for forest conservation in Mexico and has two types of categories: Hydrological and Conservation of Biodiversity. The federal government supports the incorporation of land with forest cover to the PSA to preserve the long-term provision of environmental services and brings economic incentives to owners and landowners with forest cover to maintain it in optimal conditions and carry out good forest management practices under an active conservation approach (SEMARNAT, 2016). PES is evaluated in terms of environmental, social and economic impacts, which represents the first environmental impact assessment of the sector. The results of this evaluation show that the program has had a positive effect on forest cover.

• Pesticide tax: In 2014, through the Tax Reform, a tax was imposed on pesticides, herbicides and fungicides based on their toxicity. This tax was established because there are agricultural practices that use various pesticides that have high environmental risks, including water and food, as well as serious effects on the health of the inhabitants. (SHCP, 2014). From 2014 to 2017, the total amount collected by the federal government regarding pesticides tax was MXN 2 133.32 million. It is still necessary to evaluate the impact of the tax on the reduction of externalities and in the use of less toxic pesticides.

• System of Management Units for the Wildlife Conservation (UMAS): The UMA arises in response to the

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need to reconcile and reinforce the conservation of biodiversity with the needs of production and socioeconomic development of Mexico. In 2010, the subsidy for the Promotion of the Conservation and Sustainable Use of Wildlife was launched, with the aim of responding to the growing demand for support for the establishment of UMA and for the strengthening of those previously established Through the execution from the subsidy from 2013 to 2016, 577 projects were supported for a total amount of MXN 552.9 million in 31 federal states. There is a need of evaluation of the effectiveness of this instrument.

• Entrance Fee to Natural Protected Areas: This economic instrument has been in operation for 16 years and is defined as the payment for use, enjoyment and recreational use of marine and terrestrial NPAs, according to the Federal a Law. It was very successful before 2013, when the money collected by the NPAs was returned to the one that collected it. However, after 2013 the earmarked revenues from the entrance fee have not been properly allocated by the SHCP. SEMARNAT is working on various mechanisms so that the Undersecretary of Expenditures of SHCP fulfils the specific destination by delivering the funds.

• Instruments of the Vaquita Marina Conservation Program: The main conservation actions were: a) the protection territory was expanded in the Upper Gulf of California, to guarantee coverage of the species' distribution area; b) the permanent suspension of commercial fishing was decreed through the use of gillnets; c) Economic compensation measures were granted to provide income to fishermen in the region, as an amount exceeding MXN 1 100 million; d) the implementation of the SEMAR Inspection and Surveillance Program, e) the incorporation of the Environmental Gendarmerie to inspect and surveillance tasks in the Upper Gulf of California, as well as the Amendment to the Law against Organized Crime.

• In 2017, the Vaquita Conservation, Protection and Recovery Program (Vaquita CPR) was promoted. This is a pioneering project worldwide and has the participation of about 50 experts from Asia, Europe, Oceania, North America, including, of course, our country.

• Instruments for the rescue and conservation of the Vaquita Marina: In 2013, the Comisión Asesora de la Presidencia de México para la Recuperación de la Vaquita Marina (Advisory Commission of the Mexican Presidency for the Recovery of the Vaquita Marina) was installed, with the purpose of proposing environmental, economic and social strategies and actions. In 2015 the Integral Strategy for the Recovery of the Vaquita Marina and the Totoaba was presented.

• The main actions of the Strategy are: a) the polygon of protection in the Upper Gulf of California was extended to guarantee the coverage of the specie's area of distribution; b) the permanent suspension of commercial fishing with gillnets was decreed; c) economic compensation measures were granted to provide income to fishermen in the region, in an amount exceeding MXN 1 100 million; d) the implementation of the SEMAR Inspection and Surveillance Program, e) the incorporation of the

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Gendarmería Ambiental (Environmental Gendarmerie) in the inspection and surveillance work done in the Upper Gulf of California, and the Reforma a la Ley Contra la Delincuencia Organizada (Reform of the Law against Organized Crime).

• The Strategy presents different alternatives for the Vaquita Conservation such as the use of sustainable fishing gear (suripera net for shrimp, enclosure nets and multilines for sierra, etc.) as well as alternative activities such as totoaba aquaculture, sport fishing, use of flora and fauna, tourism among others

• Subsidies for Reforestation: The restructure and reengineering of the forest restoration program towards an integral scheme have had good results. The program co-ordinates actions from the plant production process, from its verification and certification, its transport in refrigerated containers, to the articulation of soil conservation and restoration actions, with the reforestation, protection and maintenance of the reforested areas (SEMARNAT, 2017). From 2013 to 2017, 873 012 ha were reforested, which is 89% of the progress of this administration goal of one million ha with reforestation actions. Notably, the survival rate was 63%. In previous administrations, it was reported that the survival rate was 30% or even less.

5. Review programs to support indigenous people and the environment with a view to streamlining them, increasing the focus on capacity building, and achieving social and environmental objectives more efficiently.

• In 2013, Mexico implemented a Consultation Protocol for indigenous peoples and communities. This Protocol was in accordance to the standards of Convention 169 of the International Labor Organization (ILO) on Indigenous and Tribal Peoples in Independent Countries, by the Consultative Council of the National Commission for the Development of Indigenous People (CDI). The objective of the consultation system is to establish the methodological and technical procedures of consult with indigenous peoples and communities by using their institutions and representative agents in the formulation, application and evaluation of government plans, programs, projects and actions that affect their rights and their development (CDI, 2014).

• Prior to COP13, SEMARNAT, in co-ordination with the CDI, held six regional forums to identify best practices in the conservation and sustainable use of the biological diversity associated with indigenous culture, in the agricultural, forestry, fishing and tourism sectors (SEMARNAT, 2016).

• At COP 13, the active participation of indigenous organisations was vastly relevant. These organisations presented their proposals through the International Indigenous Forum on Biodiversity, which is composed of representatives of indigenous people from all over the world. The main proposals were related to the recognition of the role of indigenous people in biodiversity preservation.

• In 2017, a National Meeting of Indigenous Peoples, Local Communities and Afro-descendants of Mexico was held in follow-up to the COP13 agreements in order to introduce the commitments related to the CBD Convention, the Cartagena and the Nagoya Protocol to promote a national and regional agenda to strengthen the capacities of indigenous peoples and local communities in the matter (SEMARNAT, 2016).

• CONAFOR has supported the indigenous population regarding biodiversity and forests by increasing the indigenous population benefitted from 15% in 2012 to 25% in 2016.

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• In 2014, CONAFOR published the General Plan for Indigenous People, in the context of the Forests and Climate Change Project, which aims to promote the sustainable management of forest goods and services to improve the standard of living of more than 4 000 forest communities. The general objective of the plan is to respect indigenous rights in the implementation of public policies implemented by CONAFOR and ensure their complete and adequate participation in the programs. To achieve these objectives, CONAFOR has incorporated special guidelines in the operation rules of its programs. Currently, people from 53 out of 62 indigenous groups in the country have been served.

• One of the great advances in the preparation of the ENBioMex is the incorporation of the principle of multiculturality and the recognition of i) indigenous populations in the conservation and sustainable use of biodiversity, ii) the right to consultation of indigenous peoples of everything related to their territories and traditions, iii) traditional knowledge and iv) the fairness and equitable sharing of its benefits.

6. Identify opportunities to further engage the private sector in the conservation and sustainable use of biodiversity through, for example, the strengthening of timber and eco-tourism certification.

• During the COP13, the private sector launched the Mexican Alliance of Biodiversity and Business (AMEBIN), which aims to raise awareness among companies about the importance of biodiversity and ecosystems, for life, business and value chains to promote business investments and institutions for the sustainable use, conservation or restoration of biodiversity and natural resources.

• The 2016 Business and Biodiversity Forum was also held during the COP 13, where representatives of the private sector worldwide shared a series of experiences, analysed challenges and reviewed new tools to increase their participation in conservation and use sustainable use of natural resources (SEMARNAT, 2017).

• Forest Certification: In order to promote the certification of good forest management, Mexico has three schemes that are integrated into the Sistema Nacional de Certificación Forestal (National System of Forest Certification, SCEFORMEX), such certifications are: the preventive technical audits, national forest certification process through the Mexican Standard NMX-AA-143-SCFI-2015 or certification processes under international standards (SEMARNAT, 2016).

• Since 2014, the National Forestry Commission (CONAFOR) has been biennially developing the Expo-Forestal, through which points of convergence are established to find business opportunities among the various actors involved in forestry sector. In 2016, CONAFOR served as the witness of honour for the signing of the Strategic Alliance for the Development of the FSC Supply Chain, with which civil associations seek to reduce illegal logging in forests through wood certification. This alliance allows wood producers to have a greater number of businesses with certified products and become potential beneficiaries of more government support (CONAFOR, 2016).

• Tourism Certification: SEMARNAT promotes the Norma Mexicana de Ecotourism (Mexican Ecotourism Standard) as a voluntary norm whose purpose is to encourage the implementation of good environmental practices in ecotourism companies.

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• The Mexican Standard NMX-AA-133-SCFI-2013 has as an objective the establishment of requirements and specifications of environmental performance in ecotourism, as well as assessment of the conformity procedure for certification purposes. The norm is of voluntary compliance and applies to natural or moral persons and people interested in the sustainable performance and good environmental practices in ecotourism in the national territory. (DOF, 2014)

7. Ensure that conservation and sustainable use of biodiversity form part of more general efforts to integrate environment into sector policies, e.g. in application of strategic environmental assessment.

• The inclusion of biodiversity conservation in all the Government agencies is still under development. The Federal Agencies from the agricultural, forestry, tourism, aquaculture and fishing sectors have already incorporated biodiversity in their agendas, because of the actions derived from COP 13. Also, six federal states already developed biodiversity strategies. It is still necessary to promote that the rest of the Secretariats that have impacts on the ecosystems and the 26 remaining federal states that do not have a strategy, account for biodiversity in their activities.

• One of the projects that promote a sectorial effort to integrate the environment into agricultural policies is the Sustainable Productive Territories Project (TPS). The main objective of the TPS project is to conserve important biodiversity by improving sustainable management practices in productive areas of biological corridors. To achieve this, it seeks to introduce biodiversity-friendly production practices, improve the productive and management capacities of peasant and indigenous organisations, foster partnerships with the private sector, establish or improve relationships to access new markets and improve regulatory framework, market information systems and labelling and, in general, balance the factors to ensure environmental, economic, social and cultural sustainability. The TPS is framed in compliance with the environmental policy instruments: ecological territory zoning, official Mexican standards, environmental impact assessment, as well as management programs for protected natural areas

• .This project is co-ordinated by SEMARNAT and CONABIO where national institutions such as SAGARPA, CONAFOR, CONANP, CONAFOR, INECC and FIRA and international institutions such as the WB, GEF, AFD, GIZ and UNDP are involved.

• Also, SEMARNAT and SAGARPA are carrying out an exercise to integrate public policies for the Lacandona region. This initiative arises from a presidential instruction to conserve biodiversity and ecosystems in the region. This unprecedented exercise consists of aligning the programs of governmental agricultural support and conservation of forests and biodiversity through a spatial tool. The tool combines information from several sources, such as, areas that have received subsidies from SAGARPA (or that participated in its programs) and areas that participate in SEMARNAT programs that prevent land use change. Environmental criteria have been already included in the operating rules of the 2018 SAGARPA programs. It is expected to account for more environmental criteria within the spatial tool in the future.

The OECD conducted the second Environmental Performance Review of Mexico in 2013. This document was prepared by the Ministry of Environment and Natural Resources of Mexico. It describes some of the main policy developments since the last Environmental Performance Review as well as the actions taken to implement the review’s recommendations.

More inforMation

The 2013 Environmental Performance Review of Mexico and all data are available on

oe.cd/epr-mexico

photo credits: shutterstock.com/gary Yim;thenounproject.com/

pham duy phuong hung

http://oe.cd/epr