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Analysis-Can Mexico’s Sheinbaum, a climate scientist, shake Lopez Obrador’s oil legacy?

fxttime

 

Mexico’s President-elect Claudia Sheinbaum, an accomplished climate scientist, may face challenges in fulfilling her environmental promises after her landslide victory, which was partly due to the popularity of her predecessor, who focused on fossil fuels.

Sheinbaum, who was elected as Mexico’s first female president on Sunday, inherits a nation dealing with significant environmental issues, including widespread drought, a water crisis in Mexico City, and rampant deforestation.

The 61-year-old leftist leader, who was part of a Nobel Peace Prize-winning United Nations panel on climate change in 2007, advocates for an academic and scientific approach to politics. She has pledged to increase renewable energy to 50% by the end of her term in 2030 in the oil-producing country.

However, Sheinbaum’s mentor, outgoing President Andres Manuel Lopez Obrador, invested billions in supporting Mexico’s fossil fuel-dependent state energy companies, Pemex and CFE. This creates a potential conflict as Sheinbaum may struggle to diverge from Lopez Obrador’s policies without risking political support, limiting her ability to prioritize climate change initiatives.

“She has said repeatedly that she will continue with his policies and that her government will be a continuation of his government,” said Mariana Campero, senior associate with the CSIS Americas Program. “But she has always said that green energy is important… So how will she square that circle?”

GREEN AT HEART?

Sheinbaum credits her upbringing by a chemical engineer father and a cellular biologist mother for sparking her interest in science and politics. She holds a doctorate in energy engineering from the National Autonomous University of Mexico.

As mayor of Mexico City, she launched a rooftop solar project at a central market and inaugurated an electric bus line. However, she faced criticism for projects like the construction of a bridge in the Xochimilco ecological zone, which locals said damaged wetlands. She also supports some of Lopez Obrador’s controversial projects, such as the Mayan Train, criticized for threatening wilderness and ancient cave systems.

Despite this, some hope her presidency could improve Mexico’s climate policies, which deteriorated under Lopez Obrador due to increased fossil fuel subsidies and poor progress in reducing deforestation, according to the Climate Change Performance Index.

“I definitely think that she has that will and intention to put Mexico back on net-zero targets and in the good graces of the international community,” said Arthur Deakin, director of energy at consultancy America’s Market Intelligence.

THE PEMEX PROBLEM

Sheinbaum has promised to invest $13.57 billion in new wind and solar energy projects. However, she faces the largest budget deficit in decades, left by Lopez Obrador, which will force her to prioritize spending.

Pemex, the world’s most indebted energy company, remains a significant contributor to state finances and is seen as a symbol of energy sovereignty by many Mexicans. This makes it challenging for Sheinbaum to shift away from fossil fuels.

Pemex has a deep “emotional, historical and sentimental” importance in Mexico, said Alejandra Lopez, a public policy consultant specializing in energy issues.

Sheinbaum’s belief in the state’s role in the energy sector, historically dominated by Pemex, may complicate her efforts to boost renewable energy. A pragmatic approach, attracting investment to decarbonize energy and transportation sectors, could facilitate realistic change, Deakin suggested.

Sheinbaum could begin by raising the cap on Distributed Generation (DG) projects from 0.5 megawatts to 5 megawatts, similar to Brazil, increasing clean electricity for industrial users. Introducing biofuel policies, enhancing electric vehicle subsidies, and developing a national carbon credit framework could also drive interest in low-carbon initiatives.

“It’s a little harder when you’re struggling with a more constrained budget, but there’s other ways that emerging markets are able to create a more attractive environment for renewable electricity,” Deakin said.

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