Identifying hotspots of land use cover change in Mexico

By Alma Mendoza, Colosio Fellow with the IIASA Ecosystems Services and Management Program

Changes in land use cover can have a crucial impact on the environment in terms of biodiversity and the benefits that ecosystems provide to people. Assessing, quantifying, and identifying where these changes are the most drastic is especially important in countries that have high biodiversity along with high rates of natural vegetation loss. Socioeconomic pressures often drive land use change and the impacts are expected to increase due to population growth and climate change.

To better understand the possible impacts of land use change in Mexico over the short, medium, and long term, my colleagues and I used the Shared Socioeconomic Pathways–a set of pathways that span a wide range of feasible future developments in areas such as agriculture, population, and the economy–together with a set of climatic scenarios known as the Representative Concentration Pathways. We focused on Mexico, because the country is large enough to encompass different ecosystems, socioeconomic characteristics, and climates. In addition, Mexico is characterized by high deforestation rates, huge biodiversity, and a large number of communities with contrasting land management practices. Incorporating all these features, allowed us to take the complexity of socioecological systems into account.

We designed a model to test how socioeconomic and biophysical drivers, like slope or altitude, may unfold under different scenarios and affect land use. Our model includes 13 categories of which eight represent the most important ecosystems in Mexico (temperate forests, cloud forests, mangroves, scrublands, tropical evergreen and -dry forests, natural grasslands, and other vegetation such as desert ecosystems or natural palms), four represent anthropogenic uses (pasture, rainfed and irrigated agriculture, and human settlements), and one constitutes barren lands. We set two plausible scenarios: “Business as usual” and an optimistic scenario called the “green scenario”. We projected the “business as usual” scenario using medium rates of vegetation loss based on historical trends and combined it with a medium population and economic growth with medium increases in climatic conditions. For the “green scenario”, we projected the lowest rates of native vegetation loss and the highest rates of native vegetation recovery with a low population and medium economic growth in a future with low climatic changes.

Skyline of Mexico City © Shane Adams | Dreamstime.com

Our results show that natural vegetation will undergo significant reductions in Mexico and that different types of vegetation will be affected differently. Tropical dry and evergreen forests, followed by ‘other’ vegetation and cloud forests are the most vulnerable ecosystems in the country. For example, according to the “business as usual” scenario, tropical dry forests might decrease in extent by 47% by the end of the century. This is extremely important considering that the most recent rates, for the period 2007 to 2011, were even higher than the medium rates we used in this scenario. In contrast, the “green scenario” allowed us to see that, with feasible changes of rate, this ecosystem could increase their distribution. However, even 80 years of regeneration would not be enough to reach the extent these forests had in 1985, when they accounted for around 12% of land cover in Mexico. Moreover, the expansion of anthropogenic land cover (such as agriculture, pastures, and human settlements) might reach 37% of land cover in the country by 2050 and 43% by 2100 under the same scenario. In terms of CO2 emissions due to land use cover change we found that Mexico was responsible for 1-2% of global emissions that are the result of land use cover change, but by 2100 it could account for as much as 5%.

Our findings show that conservation policies have not been effective enough to avoid land use cover change, especially in tropical evergreen forests and drier ecosystems such as tropical dry forests, natural grasslands, and other vegetation. Cloud forests have also been badly affected. As a biologically and culturally rich country, Mexico is responsible for maintaining its diversity by implementing a sustainable and intelligent management of its territory.

Our study identified hotspots of land use change that can help to prioritize areas for improving environmental performance. Our project is currently linking the hotspots of change with the most threatened and endemic species of Mexican terrestrial vertebrates (mammals, amphibians, reptiles, and birds) to provide useful results that can help prioritize ecosystems, species, or municipalities in Mexico.

Reference:

Mendoza Ponce A, Corona-Núñez R, Kraxner F, Leduc S, & Patrizio P (2018). Identifying effects of land use cover changes and climate change on terrestrial ecosystems and carbon stocks in Mexico. Global Environmental Change 53: 12-23. [pure.iiasa.ac.at/15462]

Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.

Are all types of foreign investment driven by the same factors? The case for Mexico

By Isela-Elizabeth Tellez-Leon, IIASA-CONACYT postdoc in the Advanced Systems Analysis, Evolution and Ecology, and Risk and Resilience programs.

The rise of foreign investment in emerging economies after the global financial crisis of 2008-2009 has renewed interest in what drives such investment. My colleague at the Central Bank of Mexico and I examined the determinants of foreign investment, known as capital flows, into Mexico in 1995-2015, a period characterized by a free-floating exchange rate, that is, the authorities did not set an exchange rate.

Our research has useful findings for the design of economic policies because it provides measures that authorities can take to direct proper functioning of the economy. It also contributes to improved understanding of what influences capital flows into Mexico. We analyzed the determinants of each type of foreign investment separately, because different financial flows respond differently to the various external and internal factors. Mexico is an interesting case study because it experienced a large volume of capital investment after the commercial opening in the 1990s and more recently in the aftermath of the 2008-2009 financial crisis, as international investors were searching for high yields and security. In addition, the trading volume of Mexican government securities is one of the highest among emerging markets.

Capital flows are incorporated into financial accounts where foreign transactions are noted—including investments by foreign residents into Mexican public and private sector securities and by domestic residents in foreign securities. Mexico’s financial accounts (Figure 1) are composed of the following three components: portfolio investment (in terms of liquidity—i.e., the extent to which a market allows assets to be bought and sold at stable prices—this is a short-term investment, Figure 2), other investment (Figure 3), and foreign direct investment (in terms of liquidity this is a long-term investment, Figure 4).

The financial account is divided into three main areas: foreign direct investment (FDI), portfolio investment (PI) and other investment (OI). Figure 1 shows the net flows of foreign investment. Figure 2 displays portfolio investment (PI) and its components of domestic and foreign investors. Figure 3 and 4 show OI and FDI split into their different components. The figures show moving averages over 4 quarters adjusted for seasonality. Source: Elizabeth Tellez and the Central Bank of Mexico.

Portfolio and other investments tend to leave and enter a country quicker than foreign direct investment; thus, they are likely to respond faster to shocks. In particular, portfolio investment by foreign agents might have a different response compared to portfolio investment by domestic agents. For example, if foreign investors have timely information about the external economic conditions, they will likely respond faster to foreign shocks.

In general, foreign investment has an impact on developing economies in at least two ways. On the one hand, international borrowing allows a country to increase investment in the private sector, without sacrificing consumption. On the other hand, large foreign investment flows may be followed by increases in the prices of goods and services because of the strength of the exchange rate. In turn, this increases purchases of foreign products (imports), but exports decrease. In this way, a country’s foreign trade may become more vulnerable to external shocks and reversals of foreign investment.

Central Bank of Mexico © Elizabeth Tellez.

To analyze what determines capital flows in the short and medium term for Mexico, we used an econometric model known as Vector Autoregression. This model allows us to examine the impacts of different shocks on capital flows. We studied two sets of factors that can encourage investors to shift resources to emerging markets. The first set considers external shocks (push factors), which are beyond the control of developing countries, such as foreign interest rates or economic activity in advanced countries.

The push factors we examined were global risk, US liquidity, US GDP, and US interest rates. The second set of factors are the prevailing economic conditions in the emerging economy (pull factors). For these we considered Mexican GDP, interest rates, inflation, and exchange rates.

One of our main findings is that investors are risk averse and prefer to invest abroad when foreign interest rates are higher. Portfolio investment (PI) and other investment (OI) seem more responsive to short-term shocks than foreign direct investment (FDI), possibly because they tend to be more liquid than FDI. We also found that domestic conditions play a role in explaining capital flows. For instance, we found that higher GDP growth leads to higher portfolio investment, while higher interest rates and lower inflation generate higher inflows of other investment. Our work underlines the benefits of separately analyzing the components of capital flows. For instance, a shock to the federal funds rate has important effects on portfolio investment in public-sector securities by foreign residents. This is because public securities are the closest substitutes to US government bonds found in the Mexican financial market.

Reference:

Raul IR & Tellez Leon E (2017). Are all types of capital flows driven by the same factors? Evidence from Mexico. Banco de Mexico, Mexico.

This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.

Parched: The war for water in Mexico City

By Parul Tewari, IIASA Science Communication Fellow 2017

Mexico City has been experiencing a major water crisis in the last few decades and it is only getting worse. To keep the water flowing, the city imports large amounts of water from as far as 150 kilometers.

Not only is this energy-intensive and expensive, it creates conflict with the indigenous communities in the donor basins. Over the last decade, a growing number of these communities have been protesting to reclaim their rights to water resources.

The ancient city of Tenochtitlan as depicted in a mural by Diego Rivera
(cc) Wikimedia Commons

As part of the 2017 Young Scientists Summer Program at IIASA, Francine van den Brandeler studied the struggle that Mexico City is facing as it tries to provide water to its growing population and expanding economy. Local aquifers have been over-exploited, so water needs to be imported from distant sources, with high economic, social, and environmental impacts. Van den Brandeler’s study assesses the effectiveness of water use rights in promoting sustainable water use and reducing groundwater exploitation in the city.

“A few centuries back, Tenochtitlan, the place where Mexico City stands today, was known as the lake city,” says Van den Brandeler. The Aztecs had developed a sophisticated system of dikes and canals to manage water and mitigate floods. However, that changed quickly with the arrival of the Spaniards, who transformed the natural hydrology of the valley. As the population continued to grow over the next centuries, providing drinking water became an increasing challenge, along with controlling floods. As the lake dried up, people pumped water from the ground and built increasingly large infrastructure to bring water from other areas.

Communities from lower-income groups, living in informal settlements on the outskirts of the metropolitan region are more vulnerable to this scarcity. Many live on just few liters of water every day, and do not have access to the main water supply network, instead relying on water trucks which charge several times the price of water from the public utility.

“In wealthier areas people consume much more than the average European does every day. It is a question of power and politics,” says van den Brandeler. “The voices of marginalized communities go unheard.”

Many people rely on delivery service for drinking water.
© Angela Ostafichuk | Shutterstock

The more one learns about the situation, the more complicated it becomes. The import of water started in the 1940’s. But with a massive increase in population in the last couple of decades, the deficits have become much worse.

The government’s approach has been to find more water rather than rehabilitating or reusing local surface and groundwater sources, or increasing water use efficiency, says van den Brandeler. Therefore wells are being drilled deeper and deeper—as much as 2000 meters into the ground—as the water runs out.

Some people have started initiatives to harvest rainwater, but it is not considered a viable solution by those in charge. “A lot of it has to do with their worldview and general paradigm. The people working at the National Water Commission and the Water Utility of Mexico City have been trained as engineers to make large dams and put pipes in the ground. They don’t believe in small-scale solutions. In their opinion when millions of people are concerned, such solutions cannot work,” says van den Brandeler.
Although the city gets plenty of rain during the rainy season, it goes directly into the drainage system which is linked to the sewage system. This contaminates the water, making it unusable. At the same time, almost 40% of the water in Mexico City’s piped networks is lost due to leakages.

Policy procedures and institutional functioning also remain top-down and opaque, van den Brandeler has found. One of the policy tools for curbing excess water use are water permits for bulk use, for agriculture, industry, or public utilities supplying water. Introduced in the 1940s, lack of proper enforcement has created misuse and conflicts.
For example, while farmers also require a permit that specifies the volume of water they may use each year, they do not pay for their water usage. However, it is difficult to monitor if farmers are extracting water according to the conditions in the permit. Since they do not pay a usage fee, there is also less incentive for the National Water Commission to monitor them. As a result, a huge black market has cropped up in the city where property owners and commercial developers pay exorbitant prices to buy water permits from those who have a license. Since the government allows the exchange of permits between two willing parties, they make it appear above-board. However, it has contributed to the inequalities in water distribution in the city.

With the water crisis worsening every year, Mexico City needs to find a solution before it runs out of water completely. Van den Brandeler is hopeful for a better future as she studies the contributing factors to the problem. She hopes that the water use permits are better enforced and users are given stronger incentives to respect their allocated water quotas. Further, if greater efforts are made within the metropolis to repair decaying infrastructure and scale up alternatives such as rainwater harvesting and wastewater reuse, the city won’t have to look at expensive solutions if adopted in a decentralized manner.

About the Researcher

Francine van den Brandeler is a third year PhD student at the University of Amsterdam in Netherlands. Her research is on the spatial mismatches between integrated river basin management and metropolitan water governance – the incompatibility of institutions and biophysical systems-, which can lead to fragmented water policy outcomes. Fragmented decision-making cannot adequately address the issues of sustainability and social inclusion faced by megacities in the Global South. She aims to assess the effectiveness of policy instruments to overcome this mismatch and suggest recommendations for policy (re)design. At IIASA she was part of the Water Program and worked under the supervision of Sylvia Tramberend and Water Program Director Simon Langan.

This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.

Preventing a water crisis at the US-Mexico border

By Luzma Fabiola Nava, IIASA Water Program

North American leaders have recently announced initiatives on climate change, clean energy, the environment, and migration. But lacking from these discussions is a much-needed focus on the shared water resources that bind these countries. The Paso del Norte is a boundary region between the USA and Mexico where cooperation and joint action are needed to secure reliable and sustainable shared water resources.

Image: Paso Del Norte Watershed Council: http://www.pdnwc.org/

Image: Paso Del Norte Watershed Council: http://www.pdnwc.org/

The Paso del Norte (PdN) emblematizes an important regional focus of attention. It is located right at the midpoint of the USA-Mexico border and the Rio Grande/Bravo basin. The region extends approximately 550 km along the Rio Grande from Elephant Butte Reservoir in southern New Mexico to the confluence of the Rio Conchos in Presidio County, Texas. With a population of 2.5 million, the Paso del Norte constitutes one of the largest international cross-border regions in the world and the largest boundary metropolitan area between three states (New Mexico, Texas and Chihuahua), and two countries (the USA and Mexico).

Water is scarce in the channelized Paso del Norte. The Paso del Norte is one of the most irrigation intensive and environmentally damaged regions in the Rio Grande Basin. With an average rainfall of only about 150mm and increasing evaporation rates, crops such as maize, alfalfa, pecans, chili, and cotton are growing in this semi-arid region. Water competition is intensifying due to constant agricultural water use and growing urban water demands. Climate change is expected to reduce water availability, affect the quality of aquatic environments, and accentuate sustained drought and water scarcity.

Water scarcity will greatly worsen in the Paso del Norte region if current water policies and regulations persist and climate projections prove correct. Without new international cooperation, cross-border regions like the Paso del Norte, which includes the major cities of Las Cruces, El Paso, and Ciudad Juarez, will face a water resource crisis, as climate change and population growth place greater pressure on an already precarious system. This is why laws and regulations governing water in the Paso del Norte need to be adapted to this reality.

If we want to prevent a water crisis in this binational region, we should start working together to build institutional resilience by means of enabling regional openness and flexibility of the existing ensemble of rules and policy processes. Creating resilient water institutions in the Paso del Norte region will help the design of an ad-hoc regional basin management approach, featuring increased dialogue and coordination among all relevant parties aiming to secure water in the region. A coordinated and sustained binational effort – from the states and non-state actors- is of paramount importance to find solutions to shared problems and adapt the way water resources are being managed across the border.

The Paso del Norte Task Force, created in 1998, represents the most appropriate regional water stakeholder group with a high potential to advance sustainable water management in the region—but it needs to be revitalized. A new injection of funds could prevent this group from falling silent. . Through a collaborative effort, the Paso del Norte Task Force is in the best position to make the most effective use of the existing technical capacities and water infrastructures to adapt the management of water in the region. Its reactivation is essential to prepare an ad hoc water management plan for the region, and better respond to the challenge of securing adequate water supplies.

The Rio Grande/Bravo Basin ©Luzma Fabiola Nava | IIASA

The Rio Grande/Bravo Basin ©Luzma Fabiola Nava | IIASA

References
Nava, L.F.; Brown, C.; Demeter, K.; Lasserre, F.; Milanés-Murcia, M.; Mumme, S.; Sandoval-Solis, S. 2016. Existing Opportunities to Adapt the Rio Grande/Bravo Basin Water Resources Allocation Framework. Water, 8, 291.

US Bureau of Reclamation. SECURE Water Act Section 9503(c) — Reclamation Climate Change and Water 2016. Available online: http://www.usbr.gov/climate/secure/ (Accessed on August 21, 2016).

Boyd, E. 2012. “Adapting to global climate change: evaluating resilience in two networked public institutions”, Adapting Institutions: Governance, Complexity and Social–Ecological Resilience, ed. Emily Boyd and Carl Folke. Published by Cambridge University Press, 244 – 263 p.

Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.

You will miss the river when it runs dry: Water governance at the U.S. – Mexico border

By Luzma Fabiola Nava, Colosio Fellow and Research Scholar, IIASA Water Program

(Spanish version, Bionero.org)

Credit : Luzma Fabiola Nava

Albuquerque, New Mexico. Credit: Luzma Fabiola Nava

The Rio Grande/Rio Bravo River has been considered the most endangered river in North America and one of the most endangered rivers globally for a long time. Problems include drought and water scarcity, the degradation of water quality, loss of river habitats, and over-exploitation of groundwater. The water allocation regime between the US and Mexico is over a hundred years old and not adequate any longer. It consists mainly of allocating transboundary watercourses and facing environmental issues within a fragmented structure.

The challenge of my research is the design of policy directions to adapt water management mechanisms and foster stakeholder involvement across the river basin. Focusing on stakeholder views, I examine their competing perspectives and interests on water management and environmental protection.

Water managers at the state and federal levels, researchers and practitioners, and environmentalists suggest an alternative approach to reverse environmental degradation and preserve water resources. The Rio Grande/Rio Bravo River is a magical desert river. The river flows through primarily arid environments which, over time, have been appropriated for diverting water and meeting water needs and hydraulically developed. Some people argue that developing the desert and making it habitable and productive has accentuated the fragility of the river environment resulting in ecosystem degradation and diminished quality of life. Also, because of intensive dam-building, the river has been fragmented into sub-basins dividing the water management process and increasing the lack of coordination between agencies across the basin. River fragmentation is highly correlated with poor water quality and loss of biodiversity.

The Rio Grande River near Alberquerque, New Mexico. Credit: Luzma Fabiola Nava

The Rio Grande River near Albuquerque, New Mexico. Credit: Luzma Fabiola Nava

Some stakeholders, such as state water management agencies and researchers, suggest that the biggest environmental threats are the longer periods of drought and the overuse of groundwater, but others, such as some environmental NGO’s and state agencies (mainly in the New Mexico Lower Rio Grande) denounce citizens‘ lack of motivation and say that greater public awareness is needed. Poor participatory citizenship in the water resources decision-making process reflects the disconnection between the river and the citizens’ perceptions. Citizens do not perceive that there is a water-environmental problem since they are accustomed to seeing a dry river, yet when they turn on the tap in their houses, there is always water available.  In my interviews, some people described the Rio Grande as a vagabond, an old man; as an outsider, a homeless, as the poorest river. For these stakeholders, the biggest challenge to reverse the current environmental degradation would be to provide education in water and environmental issues in order to build broad citizen awareness across the basin. I personally think that fostering public awareness, in this fragmented area, could have a genuinely important multiplying effect to solve environmental-water related problems across the river basin.

The Rio Grande River near Mesilla, New Mexico. Credit: Luza Fabiola Nava

The Rio Grande River near Mesilla, New Mexico. Credit: Luzma Fabiola Nava

Reference

Nava, Luzma Fabiola and Samuel Sandoval-Solis. 2014. Multi-Tiered Governance of the Rio Grande/Bravo Basin: The Fragmented Water Resources Management Model of the United States and Mexico, International Journal of Water Governance, IJWG, Vol. 2., No. 1, Baltzer Science Publishers, DOI: 10.7564/13-IJWG23.

Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.