As part of the launch of the Emission Trading System (ETS) pilot program in Mexico, a study trip was organized to Germany. The objective was for private sector representatives to learn about Europe’s experience with ETS implementation, and to gain first-hand knowledge of the lessons learned, challenges and opportunities associated with implementation.
Representatives from the Mexican industrial and electricity sectors participated in sessions with experts directly involved in the implementation of the EU ETS. Throughout the study trip, they engaged in bilateral conversations, participated in group discussions, received the latest status updates about the ETS design in Mexico and discussed the Mexican industrial sector’s involvement in the development of the ETS.
The public and private sector institutions visited during the trip offered their perspectives about the implementation of the EU ETS. The Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) and the German Emissions Trading Authority (DEHSt) discussed lessons learned from the implementation of an ETS at the European and German levels. In addition, the Secretariat of the United Nations Framework Convention on Climate Change (UNFCCC) talked about the international context for carbon markets and its relevance for Mexico.
In Mexico, a study was developed to analyze the current governance of climate finance and, from there, propose a multi-stakeholder coordination mechanism that supports the creation of strategies to adequately direct available financial resources towards climate mitigation and adaptation actions.
The main objective of the multi-actor coordination mechanism on climate financing is to take advantage of existing institutional structures to increase the financing of projects and programs that focus on reducing emission pollutants and enhance the resilience of vulnerable communities. The proposal includes two primary actions.
The first action involves improving the operational effectiveness of the Financing Working Group (GT-FIN) of the Intersecretarial Commission on Climate Change (CICC). Due to the lack of clarity regarding this group’s activities and with the goal of improving multi-actor coordination, the following suggestions regarding the GT-FIN’s structure and activities were given: This working group should be composed of representatives from the 13 Secretariats of the CICC, the National Council on Science and Technology (CONACYT), the Climate Change Fund, the Mexican Agency for International Development Cooperation (AMEXCID), the Bank of Mexico, the National Banking and Securities Commission (CNBV), the National Institute of Ecology and Climate Change (INECC) and the National Institute of Statistics and Geography (INEGI). Regarding its main activities, it is recommended that the GT-FIN develop a Climate Financing Route, a guiding document whose objective will be to improve the access, allocation, management and mobilization of financing from public and private sources within and outside Mexico that carry out actions in support of the climate, the environment, and society.
The second part of the proposal aims to create a Special Committee on Climate Financing, whose objective will be to provide technical support in the design and development of the Climate Financing Route. Specifically, the Committee should take steps to improve the governance of financing by involving strategic actors and facilitating the identification of and access to resources. The Committee members should also help in defining methodologies, building technical capacity, offering recommendations on economic and financial instruments, and building knowledge to improve decision making and existing instruments such as the Climate Change Fund.
This proposal was based on an analysis of existing coordination mechanisms at the international level—for example, the Standing Committee on Finance of the United Nations Framework Convention on Climate Change and the High-Level Expert Group on Sustainable Finance of the European Union. At the national level, the legal and institutional framework associated with climate financing was examined. This included the identification of climate efforts made as a result of the General Law on Climate Change, as well as the bodies involved in the law. Also analyzed were the climate actions undertaken by other financial institutions, such as the Bank of Mexico, the Development Bank, the Private Bank, the Mexico Bankers Association, the Mexican Stock Exchange and the Green Finance Advisory Board.
The study was prepared by the Climate Finance Group of Latin America and the Caribbean (GFLAC), an organization that seeks to strengthen access to climate finance in the region, with support from the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. It forms part of the International Climate Initiative (IKI) of Germany’s Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU).
Gabriela Niño is a technical advisor in the Mexican-German Climate Change Alliance of GIZ, and Gabriela Rodríguez Martínez is the project coordinator for GFLAC.
The different agendas adopted at the international level and led by the United Nations (UN) seek to address a variety of situations facing humanity today. Understanding these agendas is fundamental to solving the problems from a more comprehensive and systematic approach.
2030 Agenda for Sustainable Development
The 2030 Agenda for Sustainable Development is the guiding axis of international development policy and one of the most important of the modern era. Through its 17 Sustainable Development Goals (SDGs) and 169 targets, the 2030 Agenda seeks to eradicate poverty, fight inequality and injustice, and tackle climate change. At the UN headquarters in September 2015, Mexico committed itself to implementing the 2030 Agenda.
Paris Agreement
The most important international policy instrument for combating climate change to date, the Paris Agreement seeks to decarbonize the economies of the signatory countries during the second half of the century and to increase their resilience to the consequences of climate change. Mexico ratified the agreement on September 14, 2016 before the Mexican Senate. The agreement’s commitments include mitigation and adaptation components.
Mitigation:
Unconditional target: reduce emissions of greenhouse gases (GHGs) by 22% and black carbon (short-lived climate pollutant) by 51% by 2030 through its own resources.
Conditional target: reduce emissions of GHG by 36% and black carbon by 70% by 2030, provided that an international framework is established so that Mexico can obtain additional resources and access the appropriate technology transfer mechanisms.
Adaptation:
Social-sector adaptation—for example, strengthen the adaptive capacity of at least 50% of municipalities classified as “most vulnerable.”
Ecosystem-based Adaptation (EbA)—for example, reach a 0% deforestation rate by 2030.
Infrastructure adaptation—for example, guarantee and monitor industrial and urban waste water treatment in human settlements with more than 500,000 inhabitants.
Kigali Amendment
The Kigali Amendment to the Montreal Protocol seeks to continue phasing down the production, consumption, import and export of hydrofluorocarbons (HFCs), greenhouse gases that contribute strongly to global warming and climate change. On June 22, 2018, Mexico ratified the Amendment through its publication in the Official Gazette of the Federation.
Linking Global Agendas
On October 3, 2018, Yuriana González Ulloa, representing the Proklima Program of the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, discussed the connection between the 2030 Agenda, the Paris Agreement and the Kigali Amendment at the AHR Expo-México® industrial exhibition on heating, ventilation, air conditioning and refrigeration (HVACR).
González Ulloa highlighted the close relationship between the three agendas and explained how fulfilling the actions of the refrigeration and air conditioning secto
r contribute to achieving the goals of the three agendas:
Example of the links between the international agendas
It is important to develop the capacities of the actors that play a fundamental role in productive systems and in actions to reduce vulnerability, mitigate emissions and increase the adaptation capacity of agri-food production to climate change.
The goal of the workshop “Raising Awareness about the Valuation and Sustainable Use of Biodiversity and Climate Change in the Agri-food Sector” was to provide participants with basic knowledge and tools on approaches to conservation and the sustainable use of biodiversity, Ecosystem-based Adaptation (EbA), the mitigation of greenhouse gas emissions, value chains and the valuation of ecosystem services in the agri-food sector.
Organized by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and the Inter-American Institute for Cooperation on Agriculture (IICA), the workshop was held in coordination with the Rural Development Support Center (CADER) of Ocotlán, Jalisco, on October 4 and 5 in the auditorium of Ocatlán’s Casa de Cultura on the bank of Lake Chapala.
Attended by 53 individuals, the workshop participants included rural producers, representatives from the Ocotlán municipal government and technical personnel from CADER Ocotlán, the Jalisco Delegation of the Ministry of Agriculture, Livestock, Rural Development, Fisheries and Food (SAGARPA), the Ministry of Rural Development (SEDER) of Jalisco, the National Forestry Commission (CONAFOR), the National Institute for the Development of Rural Capacities, A.C. (INCA Rural), the Agri-Food and Fisheries Information Service (SIAP), the Intermunicipal Association for the Protection of the Environment and Sustainable Development of Lake Chapala (AIPROMADES Lago de Chapala), the Jalisco Produce Foundation, the Institutional Trusts in Relation to Agriculture (FIRA), the Agency for Services toward the Commercialization and Development of Agricultural Markets (ASERCA), as well as consultants, and students studying agrobiotechnology at the University of Guadalajara.
Among the topics addressed in the workshop’s presentations and analysis exercises were the current situation of climate change; biodiversity and ecosystem services in the context of agri-food production; the dependence on ecosystem services for food production; the vulnerability of food production subsectors to climate change effects and its impact on food security; the role of food production on the generation of greenhouse gases; and adaptation and mitigation measures in agri-food production subsectors.
Participants expressed great interest in the workshop topics, with most of their questions and comments focused on identifying opportunities for specific collaboration efforts. The working groups made valuable contributions to value chains and vulnerability diagnoses.
They highlighted the value of this type of training that, through group exercises, allows participants to reflect and generate their own conclusions. It also helps build relationships and identify areas for collaboration.
This training will also be carried out in Michoacán, Mérida, Coahuila and Puebla.
Through technological platforms, priority is given to action points and activities linked to structural changes in the modes of production.
As a first approach, private sector producers and national agri-food sector representatives worked from a climate lens to identify priorities for promoting a structural change in the way food is produced. They used three strategic documents that discuss water availability, the value of biodiversity and the implications of climate change, as well as how to diminish the threat to the country’s agri-food productivity.
More than 40 private sector producers and representatives traveled to Mexico City on September 27, 2018. With technology lent by the Monterrey Institute of Technology and Higher Education, categories and priorities were identified to support in the selection of activities and action points currently used by the private sector in the modes and means of production. The meeting helped define the areas of opportunity for pursuing actions that enable the necessary structural changes for achieving sustainable, climate-smart production that contributes to increased competitiveness and food security.
The discussion focused on moving towards a more systematic approach in our relationship to the planet and food production. This can only be achieved through organized inter-institutional and inter-sectoral coordination, in which the skills, characteristics and activities of public and private actors are closely aligned.
The following documents guided the discussion: the Climate Change and Agri-Food Production Agenda (a document written by 38 national agricultural sector institutions coordinated by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and the Inter-American Institute for Cooperation on Agriculture [IICA]); the Strategy for the Integration of Biodiversity in Mexican Agriculture (SAGARPA, 2018); and a water study in Mexico by the Mexican Center for Water Studies A.C. The information in each document was reviewed to identify points of intersection between the activities of private sector representatives, producers in the four food production subsectors (agriculture, livestock, fishing and aquaculture, and silviculture) and their interactions in the value chain.
The key barriers and drivers for achieving a systematic change in food production at the national level were identified The importance of the country’s transition to a new government, and the definition of new international trade agreements and treaties, were also stressed. In this context, a constructive space was opened to identify which subsector actions could support the integration of this vision for sustainable agri-food production into operational frameworks, taking into account different public policies, program components, international agreements and national priorities.
Finally, participants offered ideas for future collaborations between private sector representatives, government agents and multilateral cooperation agencies. Such efforts would contribute to achieving international goals on climate change, conserving ecosystems and their resources, increasing the competitiveness of the sector and reducing the threats posed by climate change and greenhouse gas emissions from productive activities.
The new Blockchain digital technology has aroused special interest as a tool that can update climate change policy instruments, including monitoring, reporting and verification (MRV) systems, Emissions Trading Systems (ETSs), value chains and carbon footprints. Blockchain allows the exchange of information through a cryptographic protocol whose users are constantly updated and verified.
To explore its potential benefits, the Ministry of the Environment and Natural Resources (SEMARNAT) organized a “Blockchain Week” to examine how Blockchain can be applied in Mexico’s climate field. Three workshops were organized to build skills and analyze how the technology can be used in ETSs and transparency systems for climate finance and map progress towards climate mitigation and adaptation goals. The results of the workshops and interviews will lead to the development of a study about Blockchain’s potential for updating and improving climate policies in Mexico.
Within the framework of the collaboration between GIZ’s Latin American offices, an introductory study on Blockchain and climate change will soon be published. In addition, three case studies are currently being conducted in Brazil, Costa Rica and Mexico:
In Brazil, the potential for Blockchain technology for fishing and livestock sector value chains is being analyzed, taking into account climate aspects.
The Costa Rica case study focuses on the potential of Blockchain to measure the carbon footprint in the coffee sector.
In Mexico, the potential for Blockchain technology is being analyzed for carbon markets and for MRV systems for climate mitigation and financing measures.
Representatives from various Mexican institutions traveled to the Netherlands and Germany to reflect and share their experiences on climate adaptation actions related to water sustainability that were established as part of the Nationally Determined Contribution (NDC) of the Paris Agreement. The trip raised awareness about the water projects being carried out in the two countries and generated ideas on how to apply the Water Smart Cities system to Mexico.
With the inauguration of La Quebradora water park, Mexico City will be able to call itself a Water Smart City (WSC), joining cities such as Rotterdam, Beijing, Berlin and Melbourne that have carried out interventions in the public space using an integrated approach to urban water management, confronting the water challenges facing the majority of global cities head-on. Due to increased urbanization and climate change, there is great pressure to provide water to cities, as well increasing demand on hydraulic infrastructure and growing vulnerability to floods.
This situation forces cities to create urban resilience strategies that, in addition to helping cities manage flood risk more efficiently, provide them with new urban infrastructure, landscape improvements and new urban designs and dynamics.
Las medidas implementadas tienen por objetivo cerrar el ciclo urbano del agua, que se compone de las siguientes etapas:
The implementation measures aim to close the urban water cycle linked to another cycle, one that seeks to introduce measures based on nature and restore the natural capacity of cities to drain rainwater They are referred to as Water Smart City Solutions.
Like the Watersquare Benthemplein in Rotterdam, Netherlands, La Quebradora water park will reduce vulnerability to flooding in a highly densified area.
Watersquare Benthemplein
The Water Square Benthemplein, a project carried out by De Urbanisten under the Rotterdam Climate Initiative, is an urban intervention that reduces the vulnerability of the Agniese neighborhood to flooding. The project transformed an empty, dull and densely populated neighborhood into a 9,500 m² recreational space. The public space includes three large basins that, when dry, can be used as an amphitheater and for activities like skating, basketball and volleyball. But when it rains, these same basins double as retention ponds with the capacity to temporarily store 1,800 m³ of rainwater. This system helps reduce runoff, decrease pressure on the drainage system and prevent flooding.
Rotterdam, Holanda
La Quebradora water park incorporates a Water Sensitive Urban Design (WSUD) that reduces the risk of flooding caused by runoff from the Santa Catarina mountains through a water management system that collects rainwater and allows for infiltration to the aquifer. Through WSUD, in both projects it becomes possible to reintroduce the runoff into the urban landscape, avoid rainwater pollution, increase biodiversity, create more favorable microclimates that decrease solar radiation, thus preventing heat from being stored inside buildings and causing the heat island effect common to highly urbanized areas. In addition, the three pillars of WSUD are achieved: water capture in cities, the generation of ecosystem services and community participation.
The study trip took place from November 27 to December 8, 2017 and was organized by the Mexican-German Climate Change Alliance of the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. Participants included representatives from the Climate Change Directorate-General of the Ministry of the Environment and Natural Resources (SEMARNAT), the National Water Commission (CONAGUA), the National Institute of Ecology and Climate Change (INECC), the Mexican Institute of Water Technology (IMTA), the Ministry of Urban Development and the Environment (SEDUMA) of the Government of Yucatan State, and the Groundwater Technical Committee of the Basin Council of the Yucatan Peninsula.
Raquel Vargas is an urban planner, specialized in adapting water resources to climate change. Degree in Political Science and Public Administration from the National Autonomous University of Mexico, and Master in Urban Planning from the Postgraduate Course in Urban Planning at UNAM.
This article is by Raquel Vargas of the National Water Commission. The content of this article is the exclusive responsibility of the author.
States and municipalities are fundamental for fulfilling the climate agenda. Through their climate policies and programs, their actions are closely linked to those of the Nationally Determined Contribution (NDC), as states and municipalities are in direct contact with the population and responsible for identifying the problems of their territorial ecosystems.
As part of the Third National Assembly of Mexico against Climate Change, the National Meeting of Federative Entities and their Contributions to the National Determined Contribution was held in order to share experiences and success stories, and discuss areas of opportunity and financing options between state and municipality representatives.
The workshop was organized by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH together with Ministry of the Environment and Natural Resources (SEMARNAT) and the National Institute of Ecology and Climate Change (INECC). In attendance were leading climate representatives from 26 states of the republic, some of whom made presentations promoting their climate initiatives.
SEMARNAT began the workshop with a presentation about the progress of climate policies at the state level; INECC then discussed available tools that can help states improve their technical capacity in climate change mitigation. In addition, several success stories were shared from specific regions of the country—North, West, Central and Southeast—in which representatives discussed the processes, results and, most importantly, implementation challenges of their climate projects.
To better understand the characteristics of each region, participants took part in an exercise to discuss the feasibility of replicating the different climate projects in their own states. The working groups generated rich discussions, including about the common challenges facing states regarding shortages of technical personnel to implement projects and the lack of standardized methodologies. Also emphasized was the need to reinforce the interstate work in each region, given the territorial, social and political particularities of each state.
North Region
Blockchain technology’s operational efficiency, security and transaction confidence motivated the Emissions Trading System in Mexico (ETS) to explore its use for monitoring, reporting and verification (MRV) systems for greenhouse gas (GHG) mitigation and climate finance.
Distributed Ledger Technology (DLT) continues to arouse the interest of the international community. Its main attraction is the decentralized management of data, in contrast to the traditional way of storing information on a central server or assigning it to a single administrator.
Blockchain is also highly recognized in the financial community due to its immutability. Blockchains are immutable in the sense that the possibility exists of encrypting a complete block of information and repeating the process in entire chains, preventing the change of preliminary data. In other words, it ensures that the stored information will not be manipulated, thus reducing the possibility of fraud.
These characteristics suggest Blockchain’s utility in multiple areas. It is becoming increasingly common to find examples of Blockchain being used for environmental issues, specifically those related to climate change.
An Emissions Trading System (ETS) seems to be the ideal case to use Blockchain. The operation of an ETS requires a highly efficient and reliable mechanism, in which multiple actors must keep the accounts of a virtual element of limited emission with commercial value (Emission Allowance). The authority makes deposits and account holders can execute different types of registered transactions, with no room for errors or fraud. The DLT programming offers the opportunity to interact with a user-friendly interface such as any other web page or application.
Despite the identified potential, the ETSs currently operating around the world use online registries developed with conventional programming languages. Today, only China has started to develop a system using Blockchain.
The ETS project has begun studying the requirements at the institutional, regulatory, economic and technological levels to determine if the use of Blockchain could be used in the Mexican context.
In addition to analyzing the utility of Blockchain for the ETS, the project ETS will analyze the feasibility of applying Blockchain for the development of MRV systems for climate finance and GHG mitigation.
This consultancy is led by Sven Braden, founding partner of the Climate Ledger Initiative (CLI), a think tank focused on the study of DLT solutions for climate issues. As part of the consultancy, training activities will be developed for the GIZ team and the Ministry of the Environment and Natural Resources (SEMARNAT). An introductory workshop on Blockchain was held on August 23, 2018.
In the workshop, Braden explained how DLT works in a very simple way and presented some examples of how to apply Blockchain for climate change.
The consultancy will end in November 2018, at which time it is expected that the authority will have the necessary information to make an informed decision about the potential use of this technology in the country’s climate policy.
The presentations of the introductory workshop can be downloaded below. For more information on this subject, please contact us at: Comercio.Emisiones-MX [at] giz.de.
Rainwater is an alternative source of water supply for users who do not have access to public water networks. It also prevents the generation of CO2 through the transfer of water from other sources. The monitoring of rainwater catchment systems can improve their functioning and expand their benefits.
Through its State Institute of Ecology (IEE), the Government of Guanajuato State has implemented the Comprehensive Community Sustainability Program (PISC), an initiative with the objective of using renewable energies to mitigate greenhouse gases (GHGs) and meeting the needs of communities vulnerable to climate change in Guanajuato State. Since 2015, PISC has been implementing the Rainwater Capture System (SCALL) to take advantage of this natural resource.
The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, through the Mexican-German Climate Change Alliance, supported in the monitoring and evaluation of SCALL’s impact on climate change. The project was carried out by Isla Urbana, an organization that specializes in the installation of rainwater harvesting systems.
On August 24, 2018, GIZ and Isla Urbana presented the results of their impact assessment to IEE’s general director and identified several key benefits of the SCALL system:
• By providing better quality drinking water, the rainwater capture systems lead to positive health outcomes, including a reduction in the incidence of water-borne diseases. This is due to the fact that groundwater in some areas of Guanajuato is contaminated by arsenic and fluorine.
• It generates an economic savings as users can reduce their consumption of water from other sources. The rainwater collectors installed under the PISC guidelines supply approximately 15 million liters to the region, which saves approximately 13 million pesos on the purchase of water jugs or just over two million pesos on the cost of water distributed through pipes.
• It combats climate change. Through SCALL, each year 800 fewer tons of carbon dioxide are released than when consuming water from jugs, which is the source of drinking water that generates the highest levels of GHG emissions.
Additionally, it presented a list of recommendations for the correct installation of SCALL and the possibility of having systems that allow the water collected to be used for human consumption. The results will permit new routes to be implemented for Guanajuato’s PISC, which will improve beneficiary selection mechanisms, the quality of collected water, and the monitoring and evaluation of its performance. As a first measure, the IEE announced that in the next stage of PISC—to be implemented in 2019—resources will be allocated to purchase 40 SCALL with filtered drinking water systems because, as mentioned above, these have a positive health impact.
These results will also support the installation of systems in other states, which will contribute to achieving the Sustainable Development Goals (SDGs), including an end to poverty, good health and wellbeing, gender equality, clean water and sanitation, reduced inequalities, and sustainable cities and communities.
The objective of the seminar was to talk about the implementation of the Paris Agreement in Mexico, including initial steps, the integration of Mexican companies with European Union companies and the implementation of the Nationally Determined Contribution (NDC).
The implementation of the Paris Agreement was discussed based on the NDC, taking into account the costs and potential for long-term planning that includes business strategies integrating the NDC. Facilitating and promoting exchange between companies and international organizations is necessary for improving the adaptation capacity of the country’s most vulnerable municipalities to climate change.
To do so, the social sector, strategic infrastructure and ecosystem adaptation should be considered. Early warning systems are also an essential part of mitigating the effects of climate change. There is currently an opportunity to implement clean energies, zero or low emissions transport, high efficiency equipment and processes, and zero-emissions infrastructure and housing.
All of this can be done in Mexico with international support, through bilateral agreements with cooperation agencies, European institutions and international non-governmental organizations.
Despite emitting only 1.4% of global CO2 emissions, Mexico finds itself vulnerable to the effects of climate change and thus has a crucial role to play in climate mitigation. Mexico should open the voluntary carbon market, institute carbon taxes and provide clean energy certificates.
Currently, national climate goals exist as part of the implementation of the General Law on Climate Change, the Energy Reform, the Energy Transition Law and the NDC. For Mexico, taking part in international actions is a priority since temperature increases are proportional to the collateral costs for the world economy.
The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH is supporting Mexico in the implementation of the NDC by helping develop national climate policy instruments that include guiding instruments on adaptation and mitigation; it is also working with sub-national governments, directly involving itself with state entities that need support.
The British Embassy discussed the current actions that help facilitate contact between Mexican companies and small and medium enterprises in the European Union that use low emission technologies. The idea is for Mexican companies to acquire these technologies to help with climate change mitigation. In this context, several types of energy generation, energy efficiency and water management improvement projects were presented.
Representatives from the Embassy of Poland spoke about the results of the projects presented during the COP 24 climate summit. All these projects have headquarters in Mexico and Europe and have been carried out jointly with the Mexican government. The Danish Energy Agency expressed support for the implementation of mitigation measures that include the development of technological routes and NDC cost estimates.
