Improving transport sector fuel efficiency is high on the Mexican government’s agenda, as private transport currently represents around 16 percent of Mexico’s total greenhouse gas emissions.
An emissions cap and trade scheme forms the cornerstone of a regulation that the Mexican National Institute of Ecology (INE) is currently developing to promote energy efficiency in the private market for petrol and diesel light vehicles.
The proposal is unique in that it would allow trading of sales-weighted corporate efficiency averages or sales-weighted grams of carbon. This system can be made compatible with all other proposed efficiency regulations, and places no restriction on compliance strategies such as motor weight, footprint, or specific technology.
The INE has requested the Center for Sustainable Transport (CTS-Mexico) to carry out an economic analysis of this proposed cap and trade scheme to help polish its final details and provide supporting arguments to other federal actors such as the Ministry for Environment and Natural Resources (SEMARNAT), which has the legislative authority for regulation.