Mexico’s Biodiversity Expenditure Account: Update and Institutionalization

24 Oct 2023

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From this year on, the National Institute of Statistics and Geography (INEGI) will officially publish yearly the results of the Biodiversity Expenditure Review (BER) based upon the Environmental Protection Account as a result of the collaborative effort with the Biodiversity Finance Initiative (BIOFIN) of the United Nations Development Programme (UNDP) in Mexico.

Since 2015, both institutions have worked on developing a harmonized methodology to estimate the public expenditure of national and subnational governments for biodiversity conservation actions. Historically, this study was externally published by BIOFIN, with the technical endorsement of INEGI. It wasn't until 2023 that the account was officially institutionalized as part of Mexico's Economic and Ecological Accounts produced by the Institute.

The calculation methodology was built based on the Central Framework of the United Nations System of Environmental-Economic Accounting-Central Framework (SEEA-CF) used by INEGI for over 30 years, harmonized with BIOFIN's Manual. This harmonization allowed the alignment of concepts, definitions, accounting frameworks, and functional classifications from both manuals to construct a correspondence catalogue that links the accounts of Expenditure on Environmental Protection and Natural Resource Management of SEEA with BIOFIN’s biodiversity expenditure taxonomy, resulting in a configuration that could report on current and past expenditure trends.

The first BE exercise was published by BIOFIN in the document "Analysis of Federal Public Expenditure in Favor of Biodiversity in Mexico 2006-2015." Subsequently, based on that experience, the "Analysis of Biodiversity Expenditure in Mexico 2019" was upgraded with additional accounts. In 2023, INEGI institutionalized the calculation of the BE for the Federal Government, publishing results from 2003 to 2021 (links to these documents can be found at the end of this bulletin).

Additionally, in 2022, both institutions expanded the BER to include private sector investments and environmental jobs using an additional SEEA account, Environmental Goods and Services (EGS). This account allows understanding private investments related to biodiversity in the major sectors of the economy and estimate environmental jobs in the country.

These results are available in the "tabulados" section of Mexico's Economic and Ecological Accounts and can be consulted under the categories:

Gasto en protección ambiental total a favor de la biodiversidad
Sector de bienes y servicios ambientales (BySA) y empleos ambientales

Another unique feature for Mexico is the extension of the calculation methodology at the subnational level, considering the autonomy of state governments for the presentation of their information in the Public Account and in the management of their economic resources. Among the results, there is work with three entities: Mexico City, Guanajuato, and Jalisco. Results for the latter can be found on the BIOFIN Mexico website.

Support documents that can be adapted and used for the implementation of the calculation in other states have also been generated. For example, a biodiversity expenditure questionnaire was developed to facilitate data collection, along with a training workshop for environmental institutions in each state to help them understand the calculation's fundamentals, adapt it, and raise awareness about its importance.

Currently, INEGI and BIOFIN are working on updating the BER for 2022 and are considering the feasibility of adopting the Classification of Environmental Functions (CEF) proposed by the European Community, with a view to updating SEEA-CF and the Classification of Environmental Activities.

The graph below shows the latest version of Biodiversity Expenditure, which allows understanding expenditure trends between 2003 and 2021 for all public accounts with a positive impact on biodiversity. Unlike an environmental budget trend, this graph provides a better approximation of the expenses made by the entire Federal Public Administration in favor of biodiversity.

Source: Compiled by BIOFIN with data from INEGI.

BIOFIN and INEGI will continue to develop and strengthen these accounts in coming years to establish them as a source of public interest information that contributes to the development of policies and strategies to understand the impact of conservation finances in Mexico.

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