Mexico´s greenhouse gas emissions (GHG) are still negligible on a global scale, yet the country is an enthusiastic participant in efforts to reduce its emissions. Evidence suggests that its vulnerability to climate change impact, as well as its commitment to continue to grow as an emerging economy, are the drivers behind an outstanding institutional effort underway nationally. Mexico’s goal is to reduce GHG emissions by 50 percent by 2050 with respect to the year 2000 baseline, and is the only Non-Annex I nation to issue five National Communications under the UNFCC guidelines, including two National Climate Change Strategies, two special action plans, one national legislation, and several programs at the federal level. Virtually every state in the nation has completed a GHG emissions inventory and identified a set of policies for mitigation of emissions as well as adaptation to climate change.

For the strategy to maintain momentum across changing administrations, policy designers and implementers are placing emphasis on policy relevance, economic stimuli, and cost-effective measures that will create the necessary incentives for state and local government. The importance of this strategy is outlined in this paper, which focuses on the U.S.-Mexico border, where the binational Border Environment Cooperation Commission is building partnerships with experts, academics and state government officials to adapt international methodology to local conditions. This international border region is one of the most economically dynamic regions of the World and strategic not only to Mexico but to the North American Partnership as well.

The paper examines the climate action plan process undertaken in the state of Baja California, the challenges it is facing to provide useful policy recommendations by applying an economic model to assess the impact of the state’s climate action plan. The authors will present the results of using a macroeconometric model developed by Regional Economics Models, Inc. (REMI) and using supplemental equations to perform a disaggregated analysis for Electricity and Gas subsectors. The model indicates not only the impact of each isolated action, but provides an overall assessment of the impact of all actions, including the interaction effect of policies and the behavior of economic agents in the region.