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FM AMCONSUL MONTERREY
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INFO RUEHME/AMEMBASSY MEXICO 4738
RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEAEPA/EPA WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RUEHMC/AMCONSUL MONTERREY 9256

UNCLAS SECTION 01 OF 03 MONTERREY 000175 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: SENV ENRG EPET ECIN ECON PGOV MX
SUBJECT: BORDER STATES CLIMATE CHANGE WORKSHOP AND MEXICO'S CLIMATE 
CHANGE STRATEGY 
 
REF: A) 07 MEXICO 2784   B) MEXICO 0421 
 
MONTERREY 00000175  001.2 OF 003 
 
 
¶1.  Summary.  The Mexican state and federal governments 
reaffirmed their commitment to combating climate change at the 
Border States Climate Change Workshop held April 22-23 in 
Monterrey, Mexico.  The conference, sponsored by the Border 
Environment Cooperation Commission (BECC), was the first ever 
border-area gathering to bring together federal and regional 
climate change experts from the United States and Mexico. 
Mexico is currently undertaking greenhouse gas inventories on a 
state-by-state level, and the Calderon administration's Special 
Program for Climate Change has over $1.1 billion USD budgeted 
for 2009 to help reduce climate change.  The program, with 
specific targets to reduce greenhouse gas (GHG) emissions, will 
be formally announced when Mexico hosts the UNEP World 
Environment Day on June 5.  While climate change is a priority 
for President Calderon, Mexico will require additional financing 
and technical assistance in order to achieve significant 
reductions in GHG emissions.  End Summary. 
 
 
 
Border States Take Lead in Climate Change 
 
 
 
¶2.  The Border States Climate Change Workshop organized by the 
BECC was held April 22-23 in Monterrey, Mexico.  The workshop 
was the first regional conference on climate change between the 
two countries.  Cooperation along the border is vital because 
the area is highly vulnerable to global warming and also the 
area most affected by trans-boundary contamination.  The 
conference featured presentations on existing environmental 
efforts by the border states such as those by the BECC, the 
U.S.-Mexico Environmental Program (commonly referred to as 
Border 2012), Methane-to-Markets, U.S. SmartWays, and individual 
state case studies.  Many of Mexico's federal programs were 
discussed as well.  Though planned for months, the event was 
energized by the April 16 White House press release announcing a 
U.S.-Mexico Bilateral Framework on Clean Energy and Climate 
Change.  Also well received was the EPA's April 17 proposed 
finding that GHGs contribute to air pollution and may endanger 
public health and welfare. 
 
 
 
Monitoring Greenhouse Gas Emissions 
 
 
 
¶3.  Under Border 2012, the U.S. and Mexican border states have 
begun GHG inventories but there is limited progress on the 
Mexican side because of a lack of resources and technical 
expertise.  Reliable inventories are necessary to develop 
comparable emissions monitoring, establish integrity of credits, 
set cap levels and create cost-containment mechanisms.  On the 
United States side, California, Arizona, and New Mexico have 
completed full GHG inventories and Texas has completed a partial 
inventory.  On the Mexican side, Baja California,  Sonora and 
Nuevo Leon have advanced their inventories; Chihuahua, Coahuila, 
Nuevo Leon and Tamaulipas are all pending.  According to Juan 
Marin Gracia, Nuevo Leon's Director of Environmental Protection, 
Nuevo Leon expects to complete its inventory by August 2009. 
The state's inventory was only made possible by a $615,000 USD 
grant by the British Embassy.  The process for creating 
inventories and developing action plans is complex and requires 
at least a year of analysis and a budget of up to $750,000 USD. 
SEMARNAT's Institute of Ecology (INE) has provided some training 
courses to local research centers and universities so that 
states can develop their GHG inventories .  Eventually, all 
Mexican states will be required to create similar GHG 
inventories and action plans including measures for climate 
change mitigation and adaptation.  Twenty-two Mexican States 
have already submitted proposals to fund established by the 
federal government for up to $150,000 USD in funding.  In the 
past funds from EPA supported the development of Mexico's GHG 
federal inventory. 
 
 
 
Mexico's Federal Programs to Combat Climate Change 
 
 
 
¶4.  Addressing climate change has been a priority for President 
Calderon.   As explained by Jose Antonio Urteaga, Deputy 
Director General for Climate Change Projects, the importance of 
climate change in the administration is reflected in the 
 
MONTERREY 00000175  002.2 OF 003 
 
 
creation of an inter-agency Commission on Climate Change (CICC) 
which includes representatives from seven ministries - the 
ministries of Agriculture, Transportation and Communication, 
Economy, Social Development , Energy, and Foreign Relations - 
all coordinated by the Secretariat of Environment and Natural 
Resources (SEMARNAT).  The CICC's Special Program on Climate 
Change (PECC) will be formally announced on June 5, when Mexico 
hosts UNEP World Environment Day.  The PECC will include 
specific targets for GHG reductions by the end of President 
Calderon's administration in 2012 and a goal of a 50% reduction 
in GHGs by 2050. (See reftel A) 
 
 
 
¶5.  Elias Freig from the Secretariat of Finance and Public 
Credit previewed the PECC and explained how the administration 
will use the $1.1 billion USD budgeted for 2009 to mitigate the 
effects of climate change. The money is split into four current 
projects:  1. The electrical appliance replacement program; 2. 
Green housing construction; 3. The planting of trees to reduce 
greenhouse gases (known as ProArbol); and 4. A fund to invest in 
renewable energy projects.   The funds under the PECC do not 
include money spent by the Mexican government to create 
energy-efficient government buildings, mass transit, vehicle 
modernization and, more importantly, upgrades by PEMEX and CFE's 
efforts to reduce greenhouse gas emissions (energy production 
accounts for 28% of all emissions).  The figures for these 
projects were unavailable. 
 
 
 
¶6.  The electrical appliance replacement program has been the 
most popular of the climate change programs.   Accounting for 
over half of the total budget, the program replaces appliances 
such as air conditioners, and refrigerators over 10 years old 
for lower income families.  The recipients of the new appliances 
enjoy better quality of life while saving over 315 GWH per year, 
the equivalent to 210,000 tons of carbon dioxide emissions per 
year.  Since the government subsidizes up to 98% of electricity 
costs, the energy savings also directly impact the bottom line 
of the government owned electrical company (CFE).  Additionally, 
this program has the added benefit of being a counter 
recessionary measure since the appliances purchased are made in 
Mexico. The ProArbol project, on the other hand, has been more 
controversial.  After 18 months, the government has reforested 
more than 714 hectares of land but has been involved in 
overpayment schemes and embarrassed by poor management.  An 
October 2008 report by the National Forestry Commission showed 
that 42% of the trees planted by ProArbol have already died and 
many more trees are unlikely to survive another year. 
 
 
 
Cap and Trade in Mexico 
 
 
 
¶7.  Mexican companies are already participating in a cap and 
trade program as outlined by the Kyoto Protocol.  However, the 
market remains small because of a lack of liquidity and 
uncertainty over how the post-Kyoto framework and reduction 
targets will function.   The news that the Obama administration 
is working on proposing a cap and trade system in the United 
States was well received by speakers at the conference since it 
will help to advance the local market (See reftel B).  However, 
if a comprehensive U.S.-Mexico cap and trade program is not 
established, BECC officials envisioned creating a voluntary 
program in the border region modeled after the Western Climate 
Initiative, an environmental collaborative effort between 
western U.S. states and four  Canadian provinces.  A cap and 
trade system will encourage reductions in GHGs and also create 
financing opportunities for solar and wind projects in the 
region. 
 
 
 
Comment: On the Right Track but They Need Financing 
 
 
 
¶8.  Comment.  The initiative and enthusiasm shown by the Mexican 
participants at the conference was encouraging.  President 
Calderon has made the fight to reduce emissions one of the 
highlights of his presidency.  Mexico will double its wind 
generated energy by the end of the year to over 330MW and 
another 3,000MW of additional capacity is planned to go online 
in the next couple of years.  Calderon is on track to achieving 
 
MONTERREY 00000175  003.2 OF 003 
 
 
his target of 26% of electrical power produced from renewable 
energy by 2012 however this is only largely because of existing 
hydroelectric capacity.  Generally, the lack of financing was a 
common theme brought up by many of the Mexican speakers at the 
conference.   Many climate change programs in Mexico are still 
modest and any future project financing is at risk due to the 
slowdown in the Mexican economy.  Mexico will require 
significant assistance to finance and acquire technical 
knowledge in order for it to substantially reduce its GHG 
emissions.  End comment. 
WILLIAMSON