By Jorge Velarde* and Jair Bravo**
The energy gap is becoming increasingly evident between Mexico and the United States. While the latter continues to progress in its transition to sustainable energy sources, Mexico shows a slower pace. This divergence raises crucial questions about the energy future of both nations. and its impact on the economy and the environment.
Recent data evidence this contrasting landscape. According to estimates by the Economist Intelligence Unit, The United States is moving rapidly toward a greener energy future, reducing its dependence on fossil fuels and increasing its investment in clean energy. For its part, Mexico is missing a golden opportunity despite its enormous potential in renewables.
In 2021, 62.6% of the United States’ energy came from fossil sources. By 2032 that number is expected to have decreased to 52.5%. Mexico’s projections for 2032 predict a dependence on fossil energies of 70.8%. Likewise, the data reveal an encouraging trend in the United States with respect to wind and solar energy, which together are expected to represent almost 25% of the energy matrix by 2032, while in Mexico the projection is 16.5%, although there is growth in these areas.
The data places Mexico before crucial decisions that could determine its position in the global energy scenario. The opportunity for the country to capitalize on its renewable energy potential is compellingespecially at a time when demand is essential to take advantage of the investment attraction situation and, at the same time, provide sustainability to its future growth.
Mexico has opted for a protectionist and nationalizing approach, prioritizing fossil energies. This orientation has generated uncertainty in the energy sector and has dissuaded potential investors due to the need for infrastructure and renewable energy due to the phenomenon of nearshoring. As is knownthe reshoring of supply chains in North America is driving the need for more industrial parks, road infrastructure, customs and ports. These investments are essential to boost economic growth, however, a greater amount of solid energy and sustainable sources are also required in the long term.
In addition to the above, the 2024 presidential elections, both in the United States and Mexico, are seen as a possible turning point. Mexico has the opportunity to regain prominence in the global energy sphere. The next president will have the daunting task of determining the country’s energy direction, a decision that could accelerate the transition to cleaner energy sources or maintain significant dependence on fossil fuels. The energy policies of the next president will be crucial at this crossroads and his election will define the path that Mexico will take on its path towards energy sustainability.
Investors and the international community will be watching closely. Will Mexico continue down the path of energy protectionism, or will it open up to a more diversified and green future? The answer is crucial, as uncertainty over future energy policy may hold back critical investments at a time when Mexico needs to boost its economy and infrastructure more than ever. However, there are only two ways to answer this question: bet on the past or invest in the future.
*Jorge Velarde is a consulting professor at EGADE Business School
**Jair Bravo is founding partner of Bravo Abogados
Editor’s note: This text belongs to our Opinion section and reflects only the author’s view, not necessarily the point of view of High Level.
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