jaime sobrino
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Sustainable Development and Competitive Performance in Mexican Cities: Economic and Environmental Accounts
Jaime Sobrino
Presentation
Objective To study the environmental accounts in Mexico, its disintegration
from sectoral to a spatial context, and the relationships between local economic growth and environment protection in the largest Mexican cities
Contents
Main concepts about environmental accounts Operation of the environmental accounting system in Mexico Empirical analysis about the relationship between local economic
growth and environmental effects for Mexico’s largest cities Final remarks about local economic growth, competitiveness, and
environmental affairs.
Three main concepts
Sustainable / sustainability Used for the first time by the Club of Rome (The Limits to
Growth) The need to ensure a better quality of life for all, and into the
future, in a just and equitable manner, while living within the limits supporting ecosystems
Pillars: environment, economy, equity Areas of concern: quality of life; present and future generations;
justice and equity in resource allocation; living with ecological limits
Sustainable development Political and policy framework for improving the way we live, the
way we distribute goods and externalities, and the way we do business with finite resources
Three main concepts
Natural capital
Stock of resources and the environmental services involved into production
Includes the following: i) natural resources (soil, water, minerals, fossil fuels); ii) natural environment (natural parks, biosphere reserves, coasts, islands); iii) water bodies (rivers, lakes, marshes); iv) geological landscapes, and v) ecosystems
Scenarios on relationship between natural capital and local economic growth
The long-term rate of innovation exceeds any adverse effect of shortage on natural capital
As a result of the shortage of natural capital, long-term effects may either affect individual innovations or nullify technical and social innovation
The indiscriminate depletion and degradation of natural capital can be translated into limits to the long-term rate of growth
Indicators for measuring sustainability
The best known: Agenda 21 by the UN in the world conference in Rio de Janeiro in 1992. Indexes to measure environmental consequences of economic growth
The most popular: the UN Millennium Development Goals in 2000: i) eradicate extreme poverty and hunger; ii) achieve universal primary education; iii) promote gender equality and empower women; iv) reduce child mortality; v) improve maternal health; vi) combat HIV/AIDS, malaria and other diseases; vii) ensure environmental sustainability, and viii) global partnership for development
Another tool: environmental accounts
Satellite account from the national accounts
Attempt to apply numerical magnitudes to environmental factors and the use of natural capital
The key challenge is to include the Gross External Damages into the social accounting, and the need for adding external effects either as an input or as an output in the accounting framework (It is, how to measure natural capital?)
Examples in measuring natural capital
Measure the annual expenditure on air pollution control (USA)
Measure the physical endowment of natural resources and their variation over time (France and Norway)
Assign a value to natural capital changes over time (the Netherlands)
International trends
Pressure on nature and income, 1970-2008 Distributions of components across income groups
Source: A. A. Aşici, 2013
The Mexican economic and ecological accounts
Present information about Depletion of natural Resources (DNR): woods, timber forests,
hydrocarbons, and groundwater Environmental Degradation (ED): emission levels in air (pollution), soil
(garbage and solid waste), and water (aquifer contamination) Expenditure on Environmental Protection (EEP) from private and public
agencies
Year GDP TCEDDa EGDPb EEPc TCEDD / GDP EEP / TCEDD2003 806 214 68 372 737 843 4 694 8.5 6.92008 951 454 71 308 880 146 7 535 7.5 10.62012 1 029 603 65 175 964 427 9 466 6.3 14.5
a Total Costs for Environmental Depletion and Degradation.b Ecological GDP.c Expenditure on Environmental Protection
Source: prepared by the author with data from INEGI, 2014.
Table 1Mexico: main values of the economic and environmental accounts, 2003-2012
(in constant 2005 million dollars)
Environmental costs on GDP
0
2
4
6
8
10
12
14
16
2002 2004 2006 2008 2010 2012 2014
Per
cent
ages
TEC / GDPEEP / TEC
Economic and environmental costs by sector, 2008
68%
32%
DNR
ED
22%12%
30%
36%
HouseholdsPrimarySecondaryTertiary
0
5
10
15
20
25
Tra
nspo
rtat
ion
Min
ing
Agr
icul
tura
l
Oth
er ser
vice
s
Man
ufac
turing
Oth
erac
tivi
ties
BillionDollars
Urban GDP and environmental costs
Metropolitan Area GDP TECa EGDPb TCEDD / GDP
Mexico 951 454 71 308 880 146 7.5
Largest MA 604 400 39 332 565 067 6.5
Mexico City 226 748 11 561 215 187 5.1
Monterrey 66 967 3 131 63 836 4.7
Ciudad del Carmen 50 193 10 586 39 607 21.1
Guadalajara 46 807 2 223 44 584 4.7
Puebla 24 375 1 090 23 285 4.5
Toluca 18 178 872 17 306 4.8
León 14 398 914 13 484 6.3
Torreón 14 202 881 13 321 6.2
Tijuana 14 189 688 13 502 4.8
Querétaro 13 516 794 12 722 5.9
San Luis Potosí 12 860 618 12 242 4.8
Chihuahua 12 467 428 12 039 3.4
Ciudad Juárez 12 333 615 11 718 5.0
Saltillo 12 035 519 11 516 4.3
Reynosa 11 519 1 271 10 248 11.0
Veracruz 11 277 1 035 10 242 9.2
Mérida 11 073 504 10 569 4.6
Hermosillo 10 651 526 10 126 4.9
Tampico 10 650 524 10 125 4.9
Mexicali 9 963 554 9 409 5.6
Rest of the country 347 054 31 976 315 079 9.2a Total Environmental Costs.b Ecological GDP.
Table 3
Mexico: GDP and EGDP on largest metropolitan areas, 2008
(in constant 2005 million dollars)
The role of environmental costs on urban competitiveness
Variable β se (β) p > | t | β se (β) p > | t |Constant 119.878 20.220 0.000 -38.613 27.513 0.172
Ln(Pob) -6.455 1.440 0.000 3.957 1.963 0.054EC PC -0.012 0.005 0.016 -0.011 0.006 0.084Sec -0.193 0.109 0.088 0.210 0.149 0.170
R2 0.584 0.227P > F 0.000 0.062Source: preparedby the author with data from INEGI (2014).
Model 1 (Long-term) Model 2 (Short-term)
Table 4Regression results
Model 1: Long-term competitiveness Index rankModel 2: Short-term competitiveness Index rank
Control variables:Ln(Pob) Natural log of populationECPC Environmental costs per capitaSec Share of secondary sector on local GDP
Final remarks Urban competitiveness refers to the ability of a city to attract
investment
Mexican cities with the best competitive performance were not the same in each short-term economic cycle occurred since 1980
National economic growth has been slower during globalization era
There has been a significant redistribution of economic activity from Mexico City towards other urban agglomerations
Among the largest cities in the country, a better economic performance, a higher environmental cost
ljsobrin@colmex.mx
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