Potential Cuts to Climate Adaptation Funding in Mexico
Mexico faces a significant reduction of nearly 27% in federal resources allocated for climate change adaptation and mitigation. This comes at a time when international organisations are raising alarms about humanity’s trajectory towards overheating, which threatens to increase the intensity and frequency of extreme weather events. Such changes present serious risks to human health, the survival of ecosystems, and access to essential resources.
This week, the Ministry of Finance and Public Credit (SHCP) submitted the 2027 Economic Package to the Mexican Congress. This document outlines, in accordance with federal guidelines, the revenues, expenditures, and economic rules that will govern the country’s finances for the upcoming fiscal year.
Annex 16 of the document indicates that the federal government plans to allocate approximately 160.12 billion pesos to initiatives aimed at enhancing adaptation and mitigation efforts, as well as addressing damages and losses related to the climate crisis. This budget represents a real-term decrease from the 219.37 billion pesos allocated in 2026 for similar purposes.
Focus on Infrastructure and Transport Investment
The budget encompasses various programmes targeting sectors such as transport, agriculture, education, health, environmental protection, water, energy, social welfare, science, and the oil sector. Notably, there is a strong emphasis on strengthening railway infrastructure and transport.
Railway initiatives, aimed at enhancing multimodal networks and promoting more efficient and sustainable transport systems, will be managed by the Ministry of Infrastructure, Communications and Transport, with an allocation of around 54.36 billion pesos. Additionally, the Ministry of Defence is set to receive approximately 479.4 million pesos for railway infrastructure projects, including the controversial Maya Train.
The budget for the Maya Train project has faced criticism from various environmental groups for its potential negative impacts on the environment and livelihoods in southeastern Mexico. It has seen a cumulative reduction of 73.8%, decreasing from 125.94 billion pesos in 2024 to 32.98 billion pesos in 2026. This reduction is attributed to the progress of construction and diminished investment needs.
Investment in Water and Ecosystem Management
The Ministry of Environment and Natural Resources (Semarnat) is allocated over 40 billion pesos to finance initiatives related to water treatment and ecosystem preservation. For instance, it is expected to allocate 10.07 billion pesos for integrated and sustainable water management, 13.58 billion for potable water, sewage, and sanitation infrastructure, and 9.18 billion for hydro-agricultural infrastructure and wastewater treatment.
Additionally, the document includes the Sembrando Vida initiative, a social programme intended to promote agricultural production by providing independent producers with a monthly financial support of 6,500 pesos. Although this programme has faced accusations of promoting deforestation, it has been assigned around 40.5 billion pesos for the upcoming year, justified as a means to facilitate the gradual transition from fossil fuels to renewable energies.
Funding for Research and Environmental Protection
Petróleos Mexicanos (Pemex) is mentioned in the annex with a financial allocation of 10.77 billion pesos for fields related to the “production, distribution and commercialisation of oil, gas, petroleum products, and petrochemicals” and “economic infrastructure for hydrocarbons.” This funding aims to reduce greenhouse gas emissions and improve environmental performance.
Moreover, the budget includes 167.3 million pesos for enhancing knowledge about climate change, environmental protection, and ecology, alongside 219.9 million for scientific and technological research in this area. Additional funding of 169.4 million pesos is earmarked for postgraduate scholarships for students studying climate change, as well as resources for Indigenous communities aimed at adaptation and mitigation and strengthening territorial governance.
Challenges in Meeting Climate Commitments
The budget allocation for addressing the climate crisis represents the lowest amount during Claudia Sheinbaum’s administration. The 2027 Economic Package is yet to be evaluated and ultimately approved by Congress for it to take effect.
Mexico remains committed to reducing greenhouse gas emissions by 35% compared to its projected scenario, which translates to not exceeding approximately 644 million tonnes of carbon dioxide equivalent in gross emissions. However, recent assessments indicate that the country’s performance is deemed “highly insufficient” in meeting climate objectives.
Last July, the federal government introduced the Special Climate Change Programme (PECC) for 2026-2030, a roadmap designed to guide climate action that aims to convert the country’s climate commitments into measurable goals, actions, budgets, and indicators. The instrument identifies cross-cutting themes, mitigation, adaptation, losses and damages, and enabling environments and means of implementation, developing 30 strategies and action lines to be evaluated annually.
Impact of Budget Cuts on Climate Vulnerability
While this plan is viewed as an improvement in Mexico’s climate policies, the reduction in budgetary allocations may hinder its effective implementation. This concern is particularly pertinent given that Mexico is among the countries most vulnerable to the impacts of climate change. Due to its climatic characteristics and geographical location, it is estimated that around 70% of the population has been affected at least once by natural disasters, including hurricanes, tropical storms, floods, droughts, landslides, wildfires, earthquakes, and volcanic eruptions.
These conditions, often exacerbated by the climate crisis, lead to annual losses and expenditures ranging between 3.6 billion and 5 billion dollars, equivalent to approximately 1% of the national GDP. The reduced budget may limit the capacity for prevention, response, and recovery from these impacts, especially in more vulnerable regions.