Mexico’s Environmental Damage Costs Reach 4.1% of GDP in 2024

According to INEGI, in 2024 the environmental impact of human activity had a monetary value exceeding 4% of Mexico’s GDP. The study indicates that environmental degradation, particularly pollutant emissions into the atmosphere, represents the highest-risk factor.

The Economic and Ecological Accounts of Mexico, developed by INEGI, revealed that in 2024, the environmental impact of human activity reached a monetary value of MX$1.38 billion (US$75.4 million), equivalent to 4.1% of Mexico’s GDP for that year. INEGI highlighted that this percentage has remained relatively stable over the past four years. In a broader comparison, total costs related to environmental depletion and degradation have indeed decreased, though at a slow pace. In 2003, this value amounted to 6% of that year’s GDP.

Environmental depletion costs reflect the wear or loss of natural resources, including hydrocarbon extraction, groundwater depletion, and the loss of forest resources. On the other hand, environmental degradation costs include environmental damage caused by pollution and deterioration, such as air emissions, soil degradation, urban solid waste, and untreated wastewater discharges.

Based on these estimates, INEGI projects the cost of replacing or substituting natural resources, restoring ecosystems, impacts on public health, disaster response, and productivity losses resulting from environmental impacts.

According to the study, environmental degradation generates monetary costs nearly 10 times higher than resource depletion. In total, the depletion of natural resources represented monetary costs equivalent to MX$144.02 million in 2024. Of this total, 46% stemmed from hydrocarbon depletion, 28% from the depletion of forest resources, and the remaining 26% from groundwater depletion.

The total cost of environmental degradation reached MX$1.2 billion, 67% of which corresponds to degradation from pollutant emissions into the atmosphere; 17% from soil degradation; another 10% from degradation caused by urban solid waste; and the remaining 6% from degradation caused by untreated wastewater.

Globally, Mexico ranks 55th for worst air quality, and within Latin America it is the second most polluted country, only behind Guatemala and followed by El Salvador, Peru, and Chile. Nationally, pollutant concentrations exceed the levels recommended by the World Health Organization (WHO) by three to five times, which, according to the agency, is associated with 48,000 premature deaths per year.

Taking into account the estimated cost of environmental impacts, the Environmentally Adjusted Net Domestic Product (PINE) reached MX$25.7 billion in 2024, equivalent to 76.6% of Mexico’s market-price GDP. The PINE is calculated by subtracting from total GDP both fixed capital consumption and total costs associated with resource depletion and environmental degradation. In this sense, considering the environmental damage costs for 2024, national production would effectively lose around MX$23 out of every MX$100. During this period, the sectors contributing most to the PINE were trade and other services with 32.7%, followed by manufacturing industries with 17.8%.

Finally, regarding the budget allocated to environmental protection during this period, expenditures totaled MX$232.8 million, representing 0.7% of total GDP. Of this amount, 32.2% went to air protection; 20.8% to water resource management; 11% to wastewater management; and the remaining 36% was spent on various activities such as waste management, biodiversity protection and conservation, maintenance of water bodies and soil, and management of mineral, energy, and aquatic resources, as well as cross-cutting activities such as research and development, education, and environmental protection management.

INEGI emphasized that, internationally, spending on environmental protection activities as a share of GDP was similar to that of countries such as Switzerland and Spain.