Paint the town green.

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The Reality of Mexico's Climate-Change Promises

Mac Margolis writes about Latin America for Bloomberg View. He was a reporter for Newsweek and is the author of “The Last New World: The Conquest of the Amazon Frontier.”
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Mexican President Enrique Pena Nieto could use some good news. Tumbling oil prices have hurt his vaunted energy reform. Top Aides, the First Lady and Pena Nieto himself  are answering to charges of corruption, even as the authorities have managed to find the remains of just one of 43 college students who were reported kidnapped and disappeared on their way to a protest last September.

So the Mexican government's pledge to slash greenhouse gas emissions brought some welcome applause.  Green groups hailed Pena Nieto's plan as bold and pioneering, and the White House praised Mexico for "setting an example for the rest of the world" with a "landmark" initiative it called "timely, clear, ambitious, and supported by robust, unconditional policy commitments."

By promising to halt the rise of climate-warming gases by 2026, and then drive them down 22 percent by 2030, Mexico became the first developing nation to meet the United Nations' challenge to publish a road map for combating climate change. 

In stepping up, Mexico stood out. "We are trying to show that what we say in the negotiations, we stand by our words," Mexico's chief negotiator at the U.N. climate talks, Roberto Dondisch Glowinski, said late last month. "We want to show that it is feasible."

Mexico's plan comes with conditions, such as a demand for technical cooperation. The new climate change agreement between Mexico and the U.S., signed in late March, should help. Technology transfer may be trickier, since that demand could step on international property rights of tech providers, according to an analysis by Brookings Institution. Then there's the stipulation of setting an international carbon price, an elusive goal that Brookings analysts Timmons Roberts and Guy Edwards said could prove to be the "poison pill" of Mexico's pledge.

Still, because other large developing nations have balked at promising to cut CO2 emissions for fear of constricting economic growth, Mexico stands out. Brazil, for example, has boasted of curbing forest-cutting in the Amazon basin, but rejected setting pollution targets on the argument that "legacy polluters" in the developed world should take the lead. Such resistance is why developing nations were mostly excluded from the Kyoto Protocol climate obligations.

Kicking in just 1.4 percent of global emissions, Mexico is not a major climate villain. But 65 percent of its emissions come from its energy sector, which is heavily based on fossil fuels. Hence, Pena Nieto's sweeping promises to impose cleaner fuel standards for cars and heavy trucks, modernize the electrical grid and boost renewables.

Mexico drew notice for enacting a climate change law in 2012, the first developing nation to do so. It also imposed a carbon tax of $3.50 per ton of CO2 equivalent on domestic emissions and last September announced a goal of getting 35 percent of its energy from renewable sources by 2024.

But underneath Mexico's noble green intentions are some ugly gray realities. For starters, Mexico's authorities have repeatedly scaled back or scuttled their energy goals in the face of shifting economic conditions.

In 2010, the country planned to kick off its low-carbon push by building as many as 10 nuclear power plants by 2038. Then came the shale revolution, and a year later the nuclear power push was scrapped in favor of the far cheaper natural gas-fired plants. "Until we find a model to make renewable energy more profitable, gas is more convenient,” energy minister Jordy Herrera told Bloomberg News in 2011.

As oil prices plunged last year, Mexico also abandoned plans to upgrade oil refineries to produce cleaner-burning gasoline and diesel, a cornerstone to its clean fuel drive.

Pena Nieto deserves plaudits for making climate change a national priority, a rarity at a time when less-developed nations still grouse about green imperialism and condition their initiatives on receiving pots of money from rich countries.

But unless Mexico can follow through, he too will be blowing smoke.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Mac Margolis at mmargolis14@bloomberg.net

To contact the editor on this story:
James Gibney at jgibney5@bloomberg.net