Depletion and environmental degradation costs the equivalent of 4.6% of Mexico’s GDP

The economic costs of environmental depletion and degradation in Mexico amounted to 1,177,969 million pesos during 2021, this amount is equivalent to 4.6% of Mexico’s GDP during that year.

The trend shows that, despite the fact that the economic costs of the environmental impact of production are significantly high, they have remained stable in the last five years.

From 2017 to 2021, the cost of depletion and environmental degradation has remained below 4.6% of national GDP at market prices for each year, according to figures from the Economic and Ecological Accounts, which are part of the National System of National Accounts of the Inegi (National Institute of Statistics and Geography).

In 2013, for example, the cost of this impact was equivalent to 6.8% of national production.

Degradation is what costs more

In the breakdown by concept type of environmental impact, the accounts reflected that, during 2021, the costs of degradation are significantly higher than the costs of depletion.

The economic costs of environmental degradation included:

• Air emissions: 660,334 million pesos equivalent to 2.6% of GDP
• Soil degradation: 187,986 million pesos equivalent to 0.7% of GDP
• Urban solid waste: 104,869 million pesos equivalent to 0.4% of GDP
• Untreated wastewater: 50,415 million pesos equivalent to 0.2% of GDP

For their part, the economic costs of environmental depletion included:

• Hydrocarbons: 73,350 million pesos equivalent to 0.3% of GDP
• Groundwater: 60,063 million pesos equivalent to 0.2% of GDP
• Forest resources: 40,952 million pesos equivalent to 0.2% of GDP

Gap widens between economic activity and environmental deterioration

The results of the Economic and Ecological Accounts of Mexico also reflected a significant and growing mismatch between economic activity (production and consumption in the market) and the levels of environmental deterioration in the country (natural resource requirements).

While environmental deterioration is at a threshold of just over 200 points in the Base Index, the country’s production shoots up to just over 300 points on the same scale.

This reflects that economic activities are above the desired or ideal use of natural resources.

Additionally, public spending for environmental protection has fallen significantly in recent years; while in 2011 it represented 0.92% of Mexico’s GDP for that year, by 2021 it was reduced to 0.45 percent.

More than half (55.8%) of these resources that are allocated for environmental protection are for air, climate and wastewater management.

While 12.9% goes to waste management; 9.9% to public management and education; 9.2% to research and development; 6.3% to other protection activities; 4.5% goes towards the protection of biodiversity; and 1.4% to water and soil.