The economics of climate change in Mexico: implications for national/regional policy

The recent Mexican government study, The Economics of Climate Change in Mexico (ECCM), which has largely influenced Mexico's stance on climate change issues and international negotiations, is critically reviewed. Whilst the importance of such government-supported national studies as a first attempt to provide estimates on the anticipated costs of climate change is recognized, there is scope to strengthen the underlying analysis. It is argued that some of the key policy recommendations of ECCM are weakly supported by its analysis, that it has some methodological weaknesses, and that there are inconsistencies with the approach adopted in the Stern Review. Furthermore, it is likely that the estimated costs severely under-represent future climate change damages in the case of Mexico, which could deter drastic mitigation and adaptation efforts. New estimates of the costs of climate change are presented based on the impact functions of two integrated assessment models. Policy relevance Due to its large influence in building a regional view of what climate change could imply for Latin America, the analysis of the ECCM highlights the need to strengthen the analysis of national climate documents to ensure they properly support national/regional policy making. The academic evaluation of national climate change documents is a necessary prerequisite for the development of sound climate policy.