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Low-Carbon Development: Case Study for Mexico Todd M. Johnson The World Bank

Electricity. Low-Carbon Development: Case Study for Mexico Todd M. Johnson The World Bank Stockholm – February 23, 2010. Energy end-use. Transport. Agriculture and forestry. Oil and gas. Why “Low-Carbon” Development?.

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Low-Carbon Development: Case Study for Mexico Todd M. Johnson The World Bank

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  1. Electricity Low-CarbonDevelopment: Case Study for Mexico Todd M. Johnson The World Bank Stockholm – February 23, 2010 Energy end-use Transport Agriculture and forestry Oil and gas

  2. Why “Low-Carbon” Development? “Low-carbon development means having the same level of social and economic development with lower GHG emissions.”

  3. Global Emissions Reduction Pathways

  4. 1- Global CO2 Emissions by Country Source: IEA WEO 2007

  5. Mexico – GHG emissions • 14th largest emitter worldwide (1.5% of the global emissions) • 61% of Mexico’s CO2 emissions from energy consumption Source: 3ra. Comunicación Nacional, Mexico

  6. Low-Carbon Methodology • ECONOMIC AND EMISSIONS MODEL.Baseline and low-carbon scenarios constructed to 2030. • LOW-CARBON INTERVENTIONS. Assessed 40 interventions (economic cost-benefit analysis) for energy, transport, end-use energy, and agriculture and forestry. • MITIGATION OPTIONS -- SELECTION CRITERIA. (1) large-scale reduction potential (5 mt CO2e); (2) low cost (US$25/tCO2e), and (3) options should be “feasible” -- already undertaken on a commercial scale in Mexico or internationally. • CARBON BENEFITS. Cost per ton of carbon estimated for each intervention. • NEAR-TERM FOCUS. Only existing technologies and current costs of those technologies considered.

  7. Electric power Baseline and Low-Carbon Scenarios

  8. Transport Motor vehicle ownership • Historical and Projected Growth for Selected Countries Source: Dargay, Gately, and Sommer 2007.

  9. Agriculture & Forestry Source: Ghilardi and Guerrero 2009, based on REMBIO 2008; INEGI 1995, 2000, 2002.

  10. EnergyEfficiency

  11. MEDEC low carbon scenario 25

  12. Barriers to Large-scale Implementation Investment and Financing. Higher up-front costs, lack of credit markets. Regulations. Regulations for renewables and energy efficiency (cogeneration). Energy price distortions. Institutions. Governance and management by state energy companies (LFC). Coordination of federal, state and municipal policies (ex: transport). Information. Lack of knowledge by consumers (EE). New systems required by producers (intermittent RE).

  13. Conclusions for Mexico • Mexico has significant GHG reduction potential that could be tapped in the near term. • Mexico could keep emissions relatively constant over the next twenty years and without affecting economic growth by undertaking a number of low-carbon interventions. • Two-thirds of MEDEC interventions have positive financial and economic benefits regardless of climate change considerations.

  14. Global Lessons • What does a low-carbon development path look like and what tools are needed? (Economic and emissions model, cost-benefit methodology, geographical (GPS) tools) • How much might it cost to reduce global emissions? (Mexico: ~$64 billion to 2030 ($3b/year) or less than 0.4% of GDP) • Which Interventions can be done in the near term? • (Energy efficiency, transport, low-cost renewables, and forestry) Why aren’t low-carbon measures happening faster? And why are further incentives needed?

  15. Low-CarbonDevelopmentfor Full report can be found at: www.worldbank.org/mx Todd M Johnson Claudio Alatorre Zayra Romo Feng Liu MEDEC – México: Estudio sobre la Disminución de Emisiones de Carbono

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