Three Regulatory-Environmental Trends in Mexico

Day-to-day we are exposed to data and information proposed to run more sustainable businesses.  This article analyzes three main regulatory-environmental trends in México and provides useful information to improve decision-making and take action towards change.

Greenhouse gas awareness and carbon pricing

Climate Action is one of the sustainable development goals adopted by all United Nations Member States in 2015.  Leaders from government, the business community and civil society, are raising awareness of climate change and driving climate action forward.  

In México, the Ministry of Environmental and Natural Resources is pursuing to bring down emissions through the implementation of an Emissions Trading Scheme (ETS).  For the first time, regulated entities with annual emissions greater than 100,000 tons of CO2 are obligated to participate in the Pilot Program.  Mexico established the goal to reduce 1% of annual emissions for 2021 and an additional reduction of 0.3% for 2022.
The Pilot Program will have no economic impact on the regulated entities; however it will be relevant to understand the ETS design, emission allowances and trading schemes.  It will also promote investment towards cleaner and low-carbon technologies.

States are pursuing the same goal by setting forth carbon taxes. Distinct from the tax on the carbon content of fossil fuels already in place, the new ones defines a rate or price on greenhouse emissions.  While the ETS and the carbon taxes follow the polluter pays principle and are not mutually exclusive, they need to be fully aligned to be complementary and usually design to cover different sectors.

Despite the contradictory and uncoherent positions of politicians and regulators, the implementation of effective energy consumption strategies and the increase of renewable energy sources may reduce burdens on carbon pricing schemes.

Sustainable Waste Management

Effective waste management is a global mandate.  It requires actions from every single person in the world.  The regulatory agenda is full of policies, initiatives and programs aimed to achieve environmental sound management of waste through their life cycle.

Recently, local regulations are migrating from initial plastic bag bans towards banning single-use plastics.  While the items and restrictions may differ from state to state, companies shall evaluate alternatives to shift away from a reliance on single-use plastics.  Entities must evaluate impact, risk and opportunities along the plastics value chain and boost plastic recycling.  Educational campaigns aimed to change our consumption patterns and promoting sustainable lifestyles are also expected.

By the end of the first semester of 2020, the Ministry of Environmental and Natural Resources presented the Basic Diagnosis for the Comprehensive Waste Management 2020.  The document revealed 14 areas requiring better policy making, most of them focused on the regulation of special management and urban solid waste.  Progress in the recycling of secondary fiber used in the paper manufacturing process is one of the major achievements in recent years.

Legislative and regulatory activity is expected on circular economy, life cycle assessment, biodegradable and compostable criteria, eco-labeling and e-waste management.

Hydric stress and water scarcity

Early this year, the Constellation Brands brewery construction in Mexicali was cancelled on grounds that its intensive water consumption threatened water supply for the community.  The ever-rising demand for water and the degradation of water quality, among others, are intensifying the pressure on freshwater resources.

In México, federal, state and municipal governmental agencies have jurisdiction on water management.  In addition to the standard practices required to preserve water concessions, new water measurement devices requirements, including software and third party assessment will be mandatory in 2021. Locally, the water sector has been mainly regulated through economic rules.  Recently, local governmental agencies are moving into more aggressive surveillance audits, involving water supply, wastewater discharge and treatment governmental fees.

The relationship between water quality and health remains in the agenda. There are current concerns about possible health risks arising from the presence of trace concentrations of wastewater-derived substances, such as pharmaceuticals, pesticides, industrial chemicals, surfactants and personal care products.

For this reason, we recommend expanding the current compliance approach with effluent regulated standards to an effective strategy to prevent land and water degradation. The strategy involves the collection of representative samples for tailored compounds, adequate sewer system evaluation and the implementation of available control measures, among others.

Conclusions

Despite political uncertainty and lack of a clear ecological government agenda, sustainability remains a responsible approach to business. In this article we explored three of the main regulatory-environmental trends in Mexico, but the list of environmental trends with global impact continues.  Protecting biodiversity, innovation (including disruptive and innovative technologies), sustainable urban development and mobility are examples of global environmental issues that require coordinated and urgent action from the government, business and social sector.

“The environment and the economy are really both two sides of the same coin. If we cannot sustain the environment, we cannot sustain ourselves.” —Wangari Maathai