Mexico: Financial Sector Assessment Program-Technical Note on Climate Risk Analysis

International Monetary Fund

No 2022/360, IMF Staff Country Reports from International Monetary Fund

Abstract: Mexico is exposed to both transition and physical risks from climate change. Mexico’s total energy supply is dominated by fossil fuels and non-renewable energy sources. The country is the second largest emitter of greenhouse gases (GHG) in Latin America. Emissions are highly concentrated in a few economic sectors that play an important role in the Mexican economy. The Mexican financial sector has sizable exposures to these emission intensive sectors. As such, the transition to a low carbon economy raises challenges for the economy and financial sector that need to be considered. Meanwhile, Mexico is exposed to a range of physical risks, including acute risks associated with floods and tropical cyclones, by virtue of the exposure to both the North Atlantic and Eastern Pacific hurricane basins, droughts, and heatwaves, and chronic risks.

Keywords: WB staff; Banco de México; Mexico FSAP; Transition policy scenario; macro-Financial Impact; Climate change; Natural disasters; Credit risk; Greenhouse gas emissions; Global (search for similar items in EconPapers)
Pages: 59
Date: 2022-12-08
New Economics Papers: this item is included in nep-ene and nep-env
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