Mexico Needs US$99.05 Million to Tackle Climate Change
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Mexico Needs US$99.05 Million to Tackle Climate Change

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Eliza Galeana By Eliza Galeana | Junior Journalist & Industry Analyst - Thu, 09/21/2023 - 15:26

The Ministry of Finance and Public Credit (SHCP) revealed that to tackle the challenges posed by climate change and transition toward sustainable development, Mexico needs to invest MX$1.7 billion (US$99.05 million) annually until 2030.

During the presentation of the Sustainable Financing Mobilization Strategy (SFMS), Rogelio Ramírez, Minister, SHCP, pointed out that Mexico requires a consistent financing strategy to transition into a sustainable economy. “Meeting the needs of the population requires not only eliminating social gaps in poverty and inequality but also creating opportunities for growth and development with a focus on sustainability, while respecting the principles of social and climate justice,” he said. 

The SFMS, is an initiative coordinated by the SHCP, with the support of key institutions, both within and outside the financial system. Its aim is to incorporate sustainability in public finances and promote the adoption of environmentally friendly practices to benefit the Mexican population. 

According to Ramírez, to address climate change at a global scale, an estimated annual average of US$4.5 to US$5 billion is needed. Meanwhile, at the national level, figures reach approximately US$99.05 million on a yearly basis, which is equivalent to mobilizing 7% of the country’s annual GDP until 2030. “It is urgent to increase and redistribute financial resources, from both the public and private sectors, toward economic activities and projects that have lower emissions and greater social benefits,” Ramírez stated. 

Ramírez stressed that the current administration has implemented strategic actions that have positioned Mexico as a leading country in the region in terms of mobilizing sustainable financing. “A clear example is the consolidation of the sustainable debt market, which has mobilized around MX$722 billion (US$44.9 billion) involving the federal government, subnational entities, development banks and the private sector,” Ramírez said. In this regard, he noted that SHCP has issued sustainable bonds on 10 occasions within the international and domestic markets, raising more than MX$240 billion (US$13.9 billion).

Moreover, Ramírez highlighted that the implementation of Mexico’s sustainable taxonomy has boosted environmentally and socially responsible investments. The taxonomy, presented in March 2023, is a tool used to identify and categorize economic and financial activities that contribute to sustainable development and the achievement of environmental and climate objectives. “The acceptance of the taxonomy has been such that within a few months of its publication, many financial institutions from both the public and private sectors have voluntarily chosen to align their assets with this framework. These and other actions, such as linking the public budget to the UN’s SDG, and investing in sustainable infrastructure projects, are part of the strategy that we are presenting today,” asserted Ramírez. 

Photo by:   Envato Elements, Rawpixel

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