Transcript Sectoral analysis
Progress report of the Green Economy Study for Mexico Dra. Amparo Martínez Arroyo Nineteenth Meeting of the Forum of Ministers of Environment for Latin America and the Caribbean Los Cabos, Baja California. March 13th, 2014
Why to undertake a Green Economy Study for Mexico?
• Need for an accurate and solid perspective about the possible futures to: – Reduce inequality – Increase welfare and economic growth – Preserve and improve the environment and natural resources • Need to go beyon isolated sectoral analysis and link them to analysis of changes to the entire economy.
• Desire to enhance capacity to update and improve the analysis periodically, in response of the changing context (social, environmental and economic)
Study Development Process
Formal launching Institutional Collaboration Arrangements Analysis through an Steering Committee Review and Advisory work
Release of the Report Towards a Green Economy by UNEP Memorandum of Understanding about Green Economy SEMARNAT UNEP
SPONSORS CONSULTANTS
Institutes that contributed with financial and human resources to the study
INECC Coordination, supervision and technical revision
Expertos en cada uno de los temas sectoriales Economists that developed quantitative and qualitative analysis Well known experts in green economy studies
Economic EXPERTS ADVISORS
First Meeting: Introduction to the Green Economy Study for Mexico project Second Meeting: Presentation of the structure and the working team Third Meeting: Preliminary Results UNEP’s Green Economy Initiative Comisión Económica para América Latina y el Caribe Mario Molina Center for Strategic Studies in Energy and the Environment Validation by the Steering Committee
Sectors Analyzed in the Study
• • • • Agriculture Water Forestry Fisheries • • • • Industry Energy Tourism Transport
Criteria for inclusion of sectors/relevant themes:
• Direct dependence on the natural capital.
• Contribution to employment and the population livelihood.
• Participation in the national production of the entire economy
Methodological approach of the integrated cross-sectorial analysis
Social impacts
Employment creation/loss and income generated
National Analysis (general equilibrium model) General equilibrium model Economic impacts
Investment required for green economy interventions and avoided costs
Natural resources and environmental impact
Availability and demand of natural resources Analyzes the interaction of economic agents and the relationships of the markets that work simultaneously at a national level.
Sectoral analysis (system dynamics model) System dynamics model
Analyzes in detail the interaction of the economic, social and biophysical variables within each productive sector.
Example of green economy scenarios related to energy subsidy removal/ 1
Scenario Social Results of the Green Economy National Analysis (modelling for the year 2030) expenditure Investment in renewable energy and energy efficiency Gross Domestic Product Investment Social welfare B
No No
C
Yes (100%) No
GHG emissions D E
No Yes (50%) Yes (100%) Yes (50%) Note: /1. The energy subsidy includes electricity, gasoline, diesel, and liquefied petroleum gas.
Modelling example: analysis of the energy subsidy removal
What do we know about energy subsidies in Mexico?
They are regressive: 20% of the households with the greater income receive 50% of the subsidy. 20% of lower-income households receive only 4%.
They pressure the public finances : from the year 2006 till 2012, energy subsidies account for 1.8% of the national GDP.
They are environmentally harmful:
foster the overexploitation of natural resources and encourage energy intensive activities.
¿What do we need to know?
How to alleviate undesirable impacts of the subsidy removal (v.gr. Social conflicts, income of the poorest? How to maximize the benefits of the freed resources?
How to incorporate externalities (social costs) of energy?
Linkages between the Study and national policy
Government plans and programmes
Development process of the Green Economy Study for Mexico Appropriate time to influence current policy instruments as an input for its design National Development Plan 2013 -2018 Sectoral Programmes 2013 2018 Climate Change National Strategy vision 10-20-40 Energy National Strategy 2013 2027 Special Climate Change Programme 2013-2018
Next steps and final conclusion…
▪ This experience was useful to increase the national modelling and analysis capacities.
▪ The analysis enables a national dialogue to identify opportunities of technological development, the generation of employment and identifying the synergies in different sectors.
▪ Latin America and the Caribbean national studies can set up a dialogue that displays the elements for a regional initiative, using a bottom up approach.
▪ Mexico offers its expertise derived from the developing of this study that has to be dynamic and continuous work ▪ There is an opportunity to include young generations to the development of studies with a environmental integral approach