Tabasco and Biden
Written by Enrique Lendo, Business Development Mexico Advisor.
While the results in Gorgia and Arizona secured Joe Biden´s Victory, Tabasco faces the worst flooding in its history and uncertainty regarding potential support to rebuild it´s towns and economy. What happened in the states of Tabasco, Chiapas and Veracruz in the past days is not the result of atypical rain but a direct consequence of Mexico´s vulnerability to climate change. It is ironic to confirm that being Mexico an oil country, climate change is now collecting the bill.
According to Mexico´s Natural Disasters Trust Fund (FONDEN), 91% of the monies spent in disaster relief between 1999 and 2017 went to climate related events. Climate vulnerability is based on geographic and physical factors, but lack of urban planning and a culture of prevention, as well as weak capacities to reduce and manage the crisis, exacerbates the impacts. The economic cost of hurricanes and heavy rain events between 2002 and 2015 amounted to 18 billion dollars; while the flooding from last week surpassed 200 thousand people affected and 50 thousand homes damaged.
Mexico contributes with less than 2% to greenhouse gases global emissions. However, given our condition of highly vulnerable country it is imperative to flag that we are being part of the solution. What happens in other countries, especially high emitters, is particularly important. Joe Biden´s victory is a cause for celebration because it confirms the strategy that will drive the world towards decarbonization through green economic growth.
Never on the history, a president elect had such a clear environmental mandate. According to one exit poll, 74% of Biden´s voters considered climate change as especially important for its choice. Other poll concluded that 67% of all voters, not just Biden supporters, are in favor of increasing public investment in clean and renewable energy.
It is in this context that Biden proposes a “Green Deal” that will take the US to reach carbon neutrality in 2050 and its electricity sector to become 100% clean by 2035. In order to reach such goal, they will invest $2 trillion dollars of public funds that will leverage $5 additional trillions from the private sector and subnational governments; and also create 10 million new jobs. They will rejoin the Paris Agreement and consider trade sanctions to polluting countries.
After the electoral results in the US, there is no doubt that the preferences of citizens, consumers and investors are leaning towards decarbonization and green growth. A few days before the elections, China, Japan and South Korea joined the European Union with net zero emission targets by midcentury. With a similar target about to be announced in the US, 60% of the global emissions will be neutral by 2050. In the private sector the story is not too different, the value of oil and gas companies within the S&P 500 has gone from 15 to less than 3% over the last decade, predicting its eminent extinction.
With the US as its main trading partner, opportunities to develop Mexico´s low carbon potential are greater than ever. From investing in clean energy production to supply national and binational electricity markets, to manufacturing of goods and technology to service the growing demand of renewable energy, to propelling carbon emission offsets in the forest and agricultural sectors, possibilities are unlimited. Mexico is on the verge of the conditions that will define its future.
Article originally published in Reforma news paper.