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A Critique of The Economics of Climate Change in Mexico

Author

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  • Estrada, Francisco
  • Tol, Richard S. J.
  • Gay-Garc a, Carlos

Abstract

This paper revises some relevant aspects of The Economics of Climate Change in Mexico (ECCM), one of the most important documents for supporting national decisionmaking regarding the climate change international negotiations. In addition to pointing out some important methodological inadequacies, this paper shows that the ECCM's main results are questionable. Even though this study was inspired on the Stern Review and benefited from the support of original members of the Stern team, the ECCM is not consistent with the world portrayed in the Stern Review in many aspects, particularly regarding the importance of climate change impacts. The estimates of the costs of climate change for Mexico are so low that can hardly be considered to be consistent with the previous studies that have been reported in the literature concerning regional and global scales. Furthermore, it is shown that the document's main conclusion is not supported even by the estimates of the costs of the impacts of climate change and of the mitigation strategies that are presented in it. It is argued that this document has important deficiencies that do not make it adequate for supporting decision-making. In addition, the ECCM has inspired other reports regarding the economics of climate change in Central and Latin America, and as is shown here, their results are also questionable. This raises further reasons for concern because these national documents are building a regional view of what climate change could imply for Latin America that severely underestimates the importance of this phenomenon.

Suggested Citation

  • Estrada, Francisco & Tol, Richard S. J. & Gay-Garc a, Carlos, 2011. "A Critique of The Economics of Climate Change in Mexico," Papers WP408, Economic and Social Research Institute (ESRI).
    • Handle: RePEc:esr:wpaper:wp408
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    References listed on IDEAS

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    1. Francisco Estrada & Benjamín Martínez-López & Cecilia Conde & Carlos Gay-García, 2012. "The new national climate change documents of Mexico: what do the regional climate change scenarios represent?," Climatic Change, Springer, vol. 110(3), pages 1029-1046, February.
    2. William R. Cline, 1992. "Economics of Global Warming, The," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 39, October.
    3. Bollerslev, Tim, 1986. "Generalized autoregressive conditional heteroskedasticity," Journal of Econometrics, Elsevier, vol. 31(3), pages 307-327, April.
    4. Nelson, Daniel B & Cao, Charles Q, 1992. "Inequality Constraints in the Univariate GARCH Model," Journal of Business & Economic Statistics, American Statistical Association, vol. 10(2), pages 229-235, April.
    5. -, 2009. "The economics of climate change," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 38679, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
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    1. Andersen, Lykke E. & Breisinger, Clemens & Mason-D'Croz, Daniel & Jemio, Luis Carlos & Ringler, Claudia & Robertson, Richard D. & Verner, Dorte & Wiebelt, Manfred, 2014. "Agriculture, incomes, and gender in Latin America by 2050: An assessment of climate change impacts and household resilience for Brazil, Mexico, and Peru," IFPRI discussion papers 1390, International Food Policy Research Institute (IFPRI).

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