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Jaime Sobrino

Sustainable Development and Competitive Performance in Mexican Cities: Economic and Environmental Accounts. Jaime Sobrino. Presentation. Objective

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Jaime Sobrino

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  1. Sustainable Development and Competitive Performance in Mexican Cities: Economic and Environmental Accounts Jaime Sobrino

  2. 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.

  3. 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

  4. 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

  5. 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

  6. 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

  7. 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?)

  8. 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)

  9. International trends Pressure on nature and income, 1970-2008 Distributions of components across income groups Source: A. A. Aşici, 2013

  10. 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

  11. Environmental costs on GDP

  12. Economic and environmental costs by sector, 2008 Billion Dollars

  13. Urban GDP and environmental costs

  14. The role of environmental costs on urban competitiveness Model 1: Long-term competitiveness Index rank Model 2: Short-term competitiveness Index rank Control variables: Ln(Pob) Natural log of population ECPC Environmental costs per capita Sec Share of secondary sector on local GDP

  15. 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

  16. ljsobrin@colmex.mx

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