Despite Mexico's election of a new president with a background in climate science, it is not clear if the new leadership will revive a stalled national emission trading system (ETS), according to one of the country's top carbon market advocates.
President-elect Claudia Sheinbaum, the candidate for the ruling Morena party, won the 2 June election to succeed President Andrés Manuel López Obrador. But it is unclear, ahead of her inauguration on 1 October where Sheinbaum will land on wrangling the emissions program and the country's climate commitments and goals, says Eduardo Piquero, chief executive of MexiCO2, a carbon market advocate and a subsidiary of Mexico's stock exchange.
"The only hint we've had so far is during some presidential debates, she mentioned she was very keen on climate change and was going to act on Mexico's commitment," Piquero said.
Mexico launched a pilot ETS in 2020, with plans to launch a formal national program in 2022. The pilot-phase covered facilities in the energy and industrial sectors that emitted more than 100,000 metric tonnes of CO2 per year, which received allowances at no cost.
More than two years after the expected launch of a national market, a formal rollout remains in limbo, primarily because of a lack of action by the government under López Obrador, who Piquero credits with dismantling much of the program along with Mexican environment ministry Semarnat, which oversaw the program. Putting the program and Semarnat back together could take between 2-3 years, Piquero says.
Sheinbaum, the former mayor of Mexico City and a climate scientist, has not yet said what her plans are, if any, for a federal emissions trading scheme. A federal ETS will also require new legislation, given the pilot expired after 36 months, and regulators will need to convince major covered participants such as state-owned oil and gas company Pemex and power producer CFE to take part in the official program.
The government will also need to reconcile how the ETS will work with the country's state and local programs, such as state carbon taxes in Durango, Guanajuato, San Luis Potosi, Querétaro, Zacatecas, Tamaulipas, and Estado de México, along with others in-development.
Currently, Mexico has a goal of a 35pc reduction in greenhouse gas (GHG) emissions by 2030 from a 2000 baseline.
Despite a lack of policy specifics, Sheinbaum pledged to deliver on commitments of her predecessor for items like infrastructure development in southeast Mexico for new natural gas and gas-fired power generation — moves that may not support resumption of the ETS and limiting the nation's emissions.
"The only way Mexico can measure and control its emissions is through an ETS," Piquero said.
Sheinbaum is set to announce government appointments this week, which would include her choice to head Semarnat, a choice that will color discussions on the future for the ETS program. Piquero expects the job will go to one of two candidates: Marina Robles García, secretary of the environment of Mexico City, or Jose Luis Samaniego, a division chief with the UN Economic Commission for Latin America and the Caribbean.
