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Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.
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Green Growth Challenges and the Need for an Energy Reform in Mexico
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- Carla Valdivia de Richter1
- Author Affiliations
- 1: OECD, France
- 12 nov 2013
- Bibliographic information
As Mexico seeks to boost economic growth, pressures on its natural resources and environmental outcomes may intensify, jeopardizing the sustainability of that growth and the well-being of the population. Costs of environmental degradation were estimated at approximately 5% of GDP in 2011, primarily from the health impact of air pollution, while overexploitation of natural resources – such as water – threatens their sustainability. Subsidies and prices do not reflect environmental externalities or cost of providing natural resources, including scarcity costs. They result in poor environmental outcomes, represent a heavy burden on the government budget and, contrary to their original objective, have not efficiently tackled poverty and inequality. Such subsidies should be gradually removed. In the energy sector, reforms are needed in order to allow the state-owned oil company PEMEX to become more efficient operationally and environmentally, and to better provide fiscal revenues.
- climate change, energy, water sustainability, Mexico, green growth
- Classification JEL:
- H23: Public Economics / Taxation, Subsidies, and Revenue / Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- O44: Economic Development, Innovation, Technological Change, and Growth / Economic Growth and Aggregate Productivity / Environment and Growth
- Q4: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Energy
- Q5: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics