The NAFTA Promise and the North American Reality:
The NAFTA Promise and the
North American Reality:
The Gap and How to
Narrow It
October 31 – November 1, 2013
Isabel Studer
Founding Director
Global Institute for
Sustainability-Tec de
Monterrey
The challenge of the XXI century
Global CO2 emissions by fuel and global GDP growth
CLIMATE CHANGE
450 ppm limit to prevent a 2ºC increase requires: share of fossil fuels in total primary energy
demand from 82% in 2011 to 63% in 2035
81% of total CO2 emissions is locked-in with existing energy infrastructure, so scope for reaching 2 °C goal is severely constrained
Energy efficiency more than 50% of emissions savings, renewables, 21%, CCS, 12% and nuclear 8%
Cumulative investment of $16 trillion (significant cobenefits: reduced fossil-fuel import bills and local air pollution)
Source: OECD. IEA World Energy Outlook 2012
CLIMATE CHANGE
A global problem that requires a global solution (a universal agreement with mitigation commitments from developed and developing countries)
A post 2015 legal instrument that replaces the Kyoto Protocol and comes into effect in 2020
Without the US leadership such a global solution is not achievable
Energy-related CO2 emissions
per capita by region, 2011
Source: OECD. IEA World Energy Outlook 2012
From the consumption of Energy
8000
7000
6000
5000
4000
3000
2000
1000
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Canada Mexico United States
¡
Million Metric Ton
¡
Source: Own elaboration with data of the U.S. Energy Information Administration, 2012
Per Capita Carbon Dioxide
Emissions
25
20
15
10
5
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Canada Mexico
¡
Metric Tons of Carbon Dioxide per Person
United States
¡
Source: Own elaboration with data of the U.S. Energy Information Administration, 2012
TOTAL PRIMARY ENERGY
2012
Production Consumption
100
90
80
70
60
50
40
30
20
10
0
Canada Mexico United States
Source: Own elaboration with data of the U.S. Energy Information
Administration, 2012
Energy Consumption by
Source
2012
60%
50%
56%
40%
30%
32%
22%
26%
20%
29%
37%
25%
21%
10%
8%
7%
5%
4%
5%
1%
5%
3%
9%
5%
0%
Canada Mexico US petroleum natural gas hydro coal nuclear non-hydro renewables
Sources: U.S. Energy Information Administration
Crude oil, 2012
Production Consumption
20,000.00
18,000.00
16,000.00
14,000.00
12,000.00
10,000.00
8,000.00
6,000.00
4,000.00
2,000.00
0.00
Canada Mexico United States
Source: Own elaboration with data of the U.S. Energy Information
Administration, 2012
US top sources: crude oil
Source: U.S. Energy Information Administration, Petroleum Navigator.
US oil Imports and Exports, 2012
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
27.80%
12.98%
9.77%
17.63%
62.44%
69.39%
0.00%
Canada Mexico Rest of the World
Imports Exports
Source: U.S. Energy Information Administration / Annual Energy Review 2011
US Petroleum Exports by Country of Destination
Source: U.S. Energy Information Administration / Annual Energy Review 2011
US crude oil and petroleum products trade with Mexico
Source: U.S. Energy Information Administration, Petroleum Supply Monthly.
Natural Gas, 2012
Production Consumption
30,000.00
25,000.00
20,000.00
15,000.00
10,000.00
5,000.00
0.00
Canada Mexico United States
Source: Own elaboration with data of the U.S. Energy Information
Administration, 2012
2011
TRADE IN NAURAL GAS
Millions of cubic feet
Source: U.S. Energy Information Administration / Annual Energy Review 2011
US natural gas exports to Mexico
Source: U.S. Energy Information Administration, based on Office of Fossil Energy.
North American natural gas trade,
2010-2035
trillion cubic feet
Source: U.S. Energy Information Administration, Annual Energy Outlook 2012
US- Mexico electricity trade is small, while
US-Canada is well integrated
Source: U.S. Energy Information Administration, based on Ventyx Energy Velocity
Suite.
Canada and Mexico: policy takers
At least in the medium term, Canada and
Mexico lack the infrastructure to diversify their energy exports and they strongly depend on the decisions made by their large, common neighbor on energy and climate change
UNITED STATES
No comprehensive, but rather ambiguous, US policies on climate change:
•
Congress’ reluctant to approve energy
reform
•
WH introduction of stringent regulations to control CO2 emissions (politically and potentially legally challenged);
• uncertainty about the extension of current national support measures for renewables
• role of States through renewable energy portfolio standards
• a cap and trade in California
CANADA
Increasingly vulnerable to environmental policies adopted in the US relating to unconventional fossil fuels (oil sands and shale gas). Clear example: Obama’s decision to reject Transcanada’s application to construct the Keystone pipeline
Canada has been extremely cautious in the adoption of targets and timetables
aware of the need to strategically consider its policies in relation to those in the US: decision to withdrawal from the
Kyoto Protocol harmonized de facto its international negotiation policies with the
US
MEXICO
In Mexico, climate legislation is not as clearly driven by US policy, largely because Mexico is not obligated under the UNFCCC to adopt mitigation measures
However, Mexico has introduced legislation to reduce 30% CO2e emissions by 2020 and 50% by 2050 from 1990, although these goals are aspirational and dependent upon international financial resources
Mexico has set the goal of sourcing 35% of total energy consumption from clean energy sources
Mexico faces significant institutional and financial barriers that will make it difficult for the country to achieve its climate and clean energy objectives
THE AGENDA
Energy efficiency has been identified as an area of cooperation: harmonization of environmental standards, including GHG emissions given the levels of integration in the auto industry is a natural way to start
While a North American cap-and-trade system is unlikely, the informal linkage of North American systems, for example through offset schemes, remains economically desirable. Here Mexico could have a pivotal role in driving costs down for US companies and provide the necessary funding for
Mexico to make the transition to a low-carbon economy.
California’s cap and trade system is creating the impetus for policy coordination in North America.
100
80
60
40
20
160
140
120
0
Canada Mexico United
States
Solar, Tide &
Wave
Geothermal
Biomass and
Waste
Wind
Hydroelectric
The implementation of a renewable electricity standard, were it to accept out-of-the-state renewable power, would be potentially beneficial for both Canadian and Mexican border states working on hydro, wind and solar power.
Removal of fossil fuel subsidies
Carbon tax (revenue neutral, like in British
Columbia)
Mexico may offer a reliable and relatively low cost power supply from wind energy farms in the north, but the challenge is to develop the transmission lines across the borders and reconcile the state and federal regulatory frameworks on both side of the border
Mexico´s development of renewable energy sources, particularly solar and wind, will require a substantial transfer of technology and financial resources
Energy reform in Mexico: a big ?
