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Mexico Energy Efficiency Assessment for Greenhouse Gas Emissions Mitigation Final Report

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Mexico Energy Efficiency Assessment for Greenhouse Gas Emissions Mitigation Final Report MEXICO ENERGY EFFICIENCY ASSESSMENT FOR GREENHOUSE GAS EMISSIONS MITIGATION FINAL REPORT Contract No.: AID-OAA-I-12-00038, Task Order: AID-OAA-TO-14-00007 8 January 2016 This report was produced for the United States Agency for International Development. It was prepared by Crown Agents USA, Ltd. with Abt Associates, for the CEADIR project. CEADIR Mexico Energy Efficiency Assessment – Final Report Crown Agents USA, Ltd. 1 1129 20th Street NW 1 Suite 500 1 Washington DC 20036 1 T: (202) 822-8052 1 www.crownagentsusa.com With: Abt Associates Inc. CEADIR Mexico Energy Efficiency Assessment – Final Report MEXICO ENERGY EFFICIENCY ASSESSMENT FOR GREENHOUSE GAS EMISSIONS MITIGATION FINAL REPORT Contract No.: AID-OAA-I-12-00038 Task Order AID-OAA-TO-14-00007 Prepared by: Crown Agents USA Ltd with Abt Associates Inc., Washington, DC. Santiago Enriquez, Abt Associates Eric Hyman, USAID Matthew Ogonowski, USAID José Luis Castro, Abt Associates Enrique Rebolledo, Abt Associates Carlos Muñoz, Abt Associates Gwendolyn Andersen, Abt Associates Itzá Castañeda, Crown Agents USA Submitted to: Offices of Economic Policy and Global Climate Change Bureau for Economic Growth, Education, and Environment US Agency for International Development 8 January 2016 DISCLAIMER The views expressed in this document reflect the personal opinions of the author and are entirely the authors’ own. They do not necessarily reflect the opinions of the U.S. Agency for International Development (USAID) or the United States Government. USAID is not responsible for the accuracy of any information supplied herein. CEADIR Mexico Energy Efficiency Assessment – Final Report CONTENT ACRONYMS .................................................................................................................................. V ACKNOWLEDGMENTS ..............................................................................................................X EXECUTIVE SUMMARY............................................................................................................ XI Study Purpose and Methods ..................................................................................................................................xi 1. Mexico’s Climate Change Agenda and Framework .............................................................................xi Recommendations ...................................................................................................................................... xii 2. Energy Efficiency Agenda and Framework ............................................................................................xii Recommendations ..................................................................................................................................... xiii 3. Opportunities to Enhance Energy Efficiency and Reduce GHG Emissions in Key Sectors in Mexico .......................................................................................................................................xiv Transport and Urban Development ..................................................................................................... xiv Industry ......................................................................................................................................................... xv Municipal Services ...................................................................................................................................... xv Buildings ....................................................................................................................................................... xvi 1. INTRODUCTION ................................................................................................................. 1 1.1. Methods ...........................................................................................................................................................1 2. OVERVIEW OF CLIMATE CHANGE AGENDA AND FRAMEWORK .......................... 4 2.1. Federal Government Climate Change Priorities, Targets, Policies, and Laws ...............................4 2.2. Subnational Governments’ Climate Change Priorities, Targets, Policies, and Laws .....................8 The State of Veracruz ................................................................................................................................. 9 The State of Yucatán ................................................................................................................................. 10 Mexico City ................................................................................................................................................. 11 Xalapa, Veracruz ......................................................................................................................................... 11 2.3. Institutional Makeup and Responsibilities for Federal Climate Change Programs ..................... 12 2.4. Examples of Subnational Climate Change Programs ......................................................................... 13 Veracruz State ............................................................................................................................................. 13 Yucatan State ............................................................................................................................................... 14 Mexico City ................................................................................................................................................. 14 Xalapa City, Veracruz................................................................................................................................ 14 2.5. Federal MRV Systems ................................................................................................................................ 14 2.6. Subnational MRV Systems ........................................................................................................................ 19 Veracruz State ............................................................................................................................................. 19 Yucatan 20 Mexico City ................................................................................................................................................. 20 Xalapa City, Veracruz................................................................................................................................ 20 2.7. Financial Institutions and Low-Carbon Development ....................................................................... 21 2.8. Overview of Financial Instruments in Mexico for Energy Efficiency and Renewable Energy ........................................................................................................................................................... 23 2.9. Market Mechanisms for Greenhouse Gas Emissions Reductions in Mexico ............................... 32 Electricity Subsidies Reduce Incentives for Energy Efficiency .......................................................... 32 Reducing Fossil Fuel Subsidies ................................................................................................................. 33 CEADIR Mexico Energy Efficiency Assessment – Final Report i Clean Energy: Definition, Goals and Markets ...................................................................................... 35 Linking the Electricity Market of Mexico and California ................................................................... 37 Mexico’s Carbon Tax ................................................................................................................................ 38 2.10. Gender Mainstreaming in Energy and Climate Change Activities in Mexico ............................... 39 Legal Framework ........................................................................................................................................ 39 Policy Framework ...................................................................................................................................... 39 Institutional Framework ........................................................................................................................... 40 Gender Mainstreaming in Scientific Research, Innovation and Technological Development .. 40 Mexico´s Participation in International Initiatives to Mainstream Gender into Energy and Climate Change Actions ............................................................................................................ 41 Other International Organizations Mainstreaming Gender in the Energy Sector ...................... 42 2.11. Opportunities to Strengthen Mexico’s Climate Change Framework ............................................ 42 2.12. Strengthen Analytical Underpinnings of LEDS .................................................................................... 43 2.13. Foster Cross-sectoral Coordination for LEDS ................................................................................... 44 Technical Assistance to Strengthen the Energy Efficiency Legal and Institutional Framework.................................................................................................................................... 45 Workforce Development......................................................................................................................... 48 3. POTENTIAL USAID ACTIVITIES IN ENERGY EFFICIENCY .....................................
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