Mexico's incentives to become a greener country

A boy sorts fake trash into recycling bins.


Bob Moon: A second week of climate talks kicked off today in Cancun, Mexico. Host President Felipe Calderon voiced hope the outcome will put to rest what he called the "false dichotomy," that dealing with climate change conflicts with economic growth. He insisted it's not just possible to battle global warming without harming the economy -- it's good business. There's no small irony in where all this talk about climate change is taking place. Mexico -- and Cancun in particular -- have a direct interest in these meetings.

From the Marketplace Sustainability Desk, Eve Troeh reports.

Eve Troeh: Behind closed doors, international negotiators pore over arcane details on how to curb climate change. That happens in a posh resort miles away from the center of Cancun. But closer to the city, the Cancun Climate Village draws crowds of locals.

Singer Elefante singing

Think of it as a state fair on climate change. Big tents hold art and science exhibits. Bands play every night. Locals can learn about electric cars or energy efficient appliances.

Fourteen-year-old Elena Roca is catching her favorite pop star.

Elena Roca: Elefante!

And he's why she's here, though she says she does hear a lot about climate change living in Mexico.

Roca: Everywhere, everybody talks about it.

And she's happy to play a computer game about saving ecosystems.

Sounds from computer game

Roca: It's pretty cool.

Nearby younger kids sort fake trash into recycling bins.

Display worker: Separar la basura organica, la plastica carton, metales...

Environmentalism is a hard sell in Cancun, where sprawling resorts and water-sucking golf courses dominate the landscape and the economy. But the government is trying to spruce up its image for this global conference. It built a wind turbine and installed solar panels to help power the convention.

And when convention goers take the long bus rides to and from meetings, some of those buses are eco-friendly, says transportation coordinator Lorenzo Ruiz.

Lorenzo Ruiz: They are working with 100 percent bio diesel, so it's working really good.

But there are only so many buses that run on bio diesel in Mexico. So to save gas on the regular buses, Ruiz cuts back on service during down time at the convention. But he says no one's complimented him on his ingenuity.

Ruiz: They only ask, what time the bus leaves?

It's easy to dismiss these efforts in Cancun as a sideshow. But Mexico is a leader on climate issues. The government is close to passing a national law on carbon emissions, and Mexican politicians are competing for the accolades.

Jake Schmidt is with the Natural Resources Defense Council. He says Mexico knows it's vulnerable to rising sea levels, and shortages of food and water.

There's a strong domestic reason for them to take action.

The country has made big investments in solar, wind and other renewable energy projects. And that's brought money from European companies for more projects. The United Nations lets European firms count these investments in Mexico against their pollution at home. Schmidt, from the Natural Resources Defense Council, says the more Mexico puts into efforts to fight climate change, the more it attracts funding from abroad.

Schmidt: Countries that come forward with the greatest level of emission reductions, the greatest commitment to action, will likely get the most amount of money.

But it's the Kyoto Treaty on climate change that makes this investment possible. And renewing that treaty is on shaky ground at the U.N. talks here this week. That uncertainty could limit Mexico's ability to get a good return on the climate change investments it's already made.

In Cancun, I'm Eve Troeh for Marketplace.

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Hey Kai,

You kind of teased us with President Calderon "insisted it's not just possible to battle global warming without harming the economy -- it's good business", and then didn't give us any specific examples of how it is good business. Can you do a follow up on how Mexico's economy is changing from these greentech investments? Are the standards of living going up? Is unemployment going down? Where are they getting the greentech from? Thanks.

Oil gets hundreds of billions of dollars per year in help from the U.S. taxpayer. If it didn't get this help we would have to pay the full cost of getting our oil at the pump. They don't call this taxpayer help a subsidy, but if it comes from our taxes and is spent to help an industry it's a subsidy by whatever name you call it. Alternatives need a subsidy to overcome the oil subsidy.

Oil's future is limited. All the new oil is harder to get at. It will require ever more subsidy in order to delay the cost of it going so high that alternatives take over. Clean alternative energy is the new global growth market. Any time you stay invested in something that is going to decline in supply and refuse to get into a new growth market that replaces it you will lose out. Letting all the other countries to beat us into the growth market of clean renewable energy is a losing strategy.

Mexico's low-carbon industries are a good example of why this is economic insanity. Any time your *business model* depends on massive government subsidies *each and every year*, or prohibitive taxes on your competitors, that's a sign that you're wasting everyone's money. And this Mexican industry depends not just on *Mexican* government intervention, but on *Europe's* subsidies and taxes, and on specific loopholes in the European carbon-tax framework. If Europe ever comes to its senses, this industry will die.

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