Mexico to Pilot Carbon Pricing

Before launching a national carbon market in 2018, Mexico will undertake a 12-month carbon pricing demonstration project beginning in November of this year.

Regulators will recruit about 60 businesses to join the pilot, offering them the opportunity to provide input that could help shape the nascent cap-and-trade system. CleanTechnia offers a brief description of the current setup, which follows a fairly standard model:

This type of pricing scheme starts with officials setting a national limit that will bring down the levels of toxic greenhouse gas emissions from participating organizations. Regulators can then adjust the limit downward as the polluting entities comply and incorporate sustainable forms of renewable energy and industrial improvements. All participants can exchange tradable certificates to offset their emissions. Firms and other groups that lower emissions below their caps can then sell their excess allowances to other businesses that have not yet succeeded in holding to their own limits.

As part of the international climate accord reached in Paris last year, Mexico committed to reducing national greenhouse gas emissions by 22 percent by 2030, as well as to generating 50 percent clean energy by 2025.