During the 2000s, Mexico experienced average economic growth, poverty and inequality were among the highest in the OECD, and environmental degradation imposed significant costs on the economy. This chapter provides a snapshot of some key environmental trends in Mexico over the last decade, in the context of the transition towards green growth and sustainable development. It briefly describes Mexico’s progress in using energy and natural resources efficiently; in managing its natural asset base, including renewable and non-renewable natural resource stocks and biodiversity; and in improving its people’s environmental quality of life.

In the last decade, environmental sustainability has been recognised at federal level as a key dimension of Mexico’s development. There have also been significant advances in environmental policy integration. This chapter reviews the main strategies and initiatives that were launched during the decade in the areas of sustainable development and environmental management. It examines Mexico’s environmental governance and the mechanisms in place to improve horizontal and vertical co-ordination. Other environmental governance issues examined include: enforcement and compliance; mechanisms to evaluate the environmental impact of public policies; and promoting environmental democracy, through better access to information, improved public participation and access to justice.

Mexico has to confront difficult trade-offs in pursuing its economic, social and environmental goals. This chapter examines Mexico’s use of taxation policy to pursue environmental and social objectives and progress in removing environmentally harmful subsidies. The chapter also looks at other economic instruments to implement the polluter-pays and user-pays principles and to recover the cost of providing environmental services. Mexico’s innovation performance, including on environment, is also assessed. Finally, the chapter briefly reviews the environmental dimension of Mexico’s development co-operation and mechanisms for environmental co-operation in trade agreements.