The energy transition is a challenge and a necessity for Mexico’s economic transformation as, on the one hand, the country spends 7.6% of its GDP on fossil fuel subsidies and, on the other hand, in 2020 it was estimated that the economic impact of climate disaster increased by 202%. Indeed, to achieve a successful energy transition and secure a sustainable growth path, Mexico needs to modernise its energy sector, reduce reliance on fossil fuels, and ensure sustainability. However, it is necessary to start from the territory, involving communities in the co-construction of resilience and the strengthening of local productive chains. Community and cooperative models play an essential role in promoting the creation of collective businesses managed in a democratic and solidary manner.

An example of just transition opportunities are energy cooperatives. They are a clear and promising model that involves local communities in the production, distribution and consumption of renewable energy, promoting decentralisation and democratisation of energy, especially in those territories historically and systematically excluded.

However, research conducted in Mexico during the first phase of the Research Facility on Inequalities showed low wealth sharing and limited social mobility in the country. In this context, it is necessary to address the just energy transition from an intergenerational social mobility approach and a social perspective to ensure benefits for the whole society. 

This work is also part of AFD's dialogue with the Mexican authorities on options for diversifying the economy and reducing inequalities.

Find out more about the Extension in Mexico

In partnership with the Centro de Estudios Espinosa Yglesias (CEEY) and in collaboration with the National Institute of the Social Economy (INAES), this research project aims to develop a conceptual and analytical research input for a better understanding of the role that renewable energy cooperatives can play in reducing inequality and increasing social mobility, and how they can be financed. 

This input will:

• Conceptualise the just energy transition approach in the area of existing structural inequalities;
• Make a diagnosis from the perspective of intergenerational social mobility, as well as from the perspective of social and solidarity economy, and its relevance in the framework of just transitions, in order to establish identification criteria, social selection and prioritisation of projects;
• Use this diagnostic to propose criteria for the identification and selection of projects that prioritise the populations with the greatest disadvantages of origin (with the least space for social mobility), given the requirement of «no losers» of the just transition;
• Review and articulate technical issues related to decentralised energy and distributed generation, given their importance in the social economy in the just energy transition;
• Review the current INAES projects related to the subject in order, where appropriate, to guide the construction of identification and selection criteria.  

The research team will first conduct an exhaustive review of literature focused on environmental justice, climate justice, social mobility applied to environmental justice and intergenerational environmental justice. The literature will be analysed from the perspective of the energy transition and the intersection of these issues.

Based on this review of literature, researchers will develop a conceptual framework to understand the just energy transition in the field of current structural inequalities. It will also explain how this conceptual framework can be relevant for public policy decision-making.

The research team will also identify information gaps and research needs, with a special focus on the study of just energy transitions.

You will find below the different research papers related to this project:

In progress

Trade integration has been very beneficial for Latin America and the Caribbean (LAC) over the past 30 years. However, multiple crisis (the financial crisis of 2008, the Covid-19 pandemic, the climate crisis, etc.) have generated uncertainty about the future of the multilateral trading system. For example, the Covid-19 pandemic highlighted the fragility of certain value chains due to the vulnerability of a system in which factories are located at the other end of the world from where these goods are consumed. All this is leading to reconfigure global value chains, which tend to shorten, becoming less global and more regional – a phenomenon known as the “nearshoring model”. This new context creates an opportunity for LAC countries, and especially for Mexico, which identify themselves as the best alternative for the relocation of value chains under the nearshoring model.

Historically, the Mexican North-Central states have benefited most from the processes of integration into global value chains. This is natural, since it is where the manufacturing export base is located due to its proximity to the United States. On the other hand, the South-South-East of the country presents historical lags that make it significantly difficult to integrate it into global value chains and, therefore, to take advantage of change in the current international context.

In this regard, it is imperative to design strategies to take advantage of the opportunity presented by the nearshoring phenomenon, taking into account the particular problems of each region. This two-speed strategy is essential to define public policy interventions that can achieve more equitable regional development.

This research project complements the work carried out by the Extension of the Research Facility on Inequalities in Mexico on the national care system and on the redistributive impact of environmental policies.
 

Find out more about the Extension in Mexico

This project aims to deepen the study of the phenomenon of relocation of global value chains to Mexico, recognising the challenges and opportunities it generates:

1. First specific objective: To present a proposal to overcome one of the most critical bottlenecks identified by the productive sector, which is electricity generation. It is suggested to close the investment gap in electricity in the short term, through investment in distributed generation with solar panels, as well as exploring sustainable and equitable options, with a particular focus on the State of Nuevo León (North of the country).
2. Second specific objective: To identify economic sectors with potential to benefit from the phenomenon of relocation of value chains and to address existing gaps in the formation of talent and human capital, emphasising social inclusion and gender equity. This will include a detailed analysis for the states of Oaxaca and Veracruz (South of the country), aiming to develop skills in emerging and traditional sectors, and prepare the workforce to take advantage of opportunities in the medium and long term.
3. Third specific objective: To develop a strategic plan for the implementation of a portfolio of solutions based on the recommendations identified in the first and second specific objectives.

• First specific objective: Scenario analysis will be used to measure the gap between demand and capacity for electricity generation. Solar distributed generation capacity scenarios will use Geographic Information Systems spatial analysis tools, while the estimates on the redirection of subsidies will be taken from official public sources.
• Second specific objective: Generated using a combination of international and national databases, economic metrics will serve to identify opportunities to boost productive diversification. A preliminary analysis will suggest industry clusters to prioritize. This will allow to select economic sectors with the potential to trigger industrial development, through interventions in the field of talent training. Talent gaps will then be identified through quantitative analysis. This cabinet analysis will be complemented with qualitative information (interviews, focus groups with key actors…).
• Third specific objective: The strategic plan will follow a mission-oriented policy approach, including a detailed action plan to be presented to the Mexican Federal Government. The plan will consist of a map of possible executing units within the federal, state and/or municipal governments, an analysis of the regulatory and institutional constraints that the plan could face, as well as strategic alternatives to overcome them.

You will find below the different research papers related to this project:

In progress

While there is mounting evidence that the Covid-19 pandemic has increased socioeconomic inequality, there is still a need to understand the exact channels of impact and what role the policy response has played in different contexts. It is also necessary for governments to be clear about the efficiency of the type of policies they have implemented throughout this period, in terms of the redistributive and/or regressive effect both from an inequality and poverty perspective. Indeed, we know that the amount of additional social spending (excluding health) implemented during the pandemic reached almost 3% of GDP in Colombia and only 0,2% in Mexico. However, research has not yet demonstrated whether the redistributive policies introduced by the Mexican and Colombian governments in response to the Covid-19 crisis have had any positive effect on the distribution of economic and social resources in these two countries.

The project will seek to understand what has been the redistributive impact of social and fiscal policy in Mexico and Colombia, in the context of the policies implemented during the Covid-19 pandemic.

This research project will be conducted as follows: 

1. Using the framework of the Commitment to Equity (CEQ) methodology, an analysis aiming to differentiate what has been the progressivity or regressivity of the policies implemented during the Covid-19 pandemic will be conducted. This analysis will take into account the main beneficiary groups of these policies and will include a comparison between the budget amount and the efficiency of the policies identified in terms of inequality and poverty reduction.  
2. A desktop analysis of the decision-making will also be carried out to understand how the redistributive effects of the policies implemented were envisaged by the governments. 

The results of this project are presented in the following research paper: Promoting a More Progressive Approach - Evaluating the Impact of Social and Fiscal Policies in Mexico and Colombia amidst the Covid-19 Pandemic (2025)

This research paper analyzes the redistributive impact of some fiscal policies and social programmes (direct taxes and transfers) before and after the pandemic Crisis in Mexico and Colombia, following the CEQ methodology. 

Download the paper

Despite a renewed interest for the notion of “commons” within the academic world, little work has been done about land and housing issues in cities of the Global South.

Yet access to urban land is a major issue for dwellers of these rapidly growing cities and a determining factor for the improvement of their living conditions and for their access to “adequate housing”, according to UN terminology. The mainstream approach to urban land tenure, based on full individual private ownership and the free market, generates speculation and land grabbing, and exclusion of the most precarious households.

The critical dimension of the commons notion opens up innovative ways to produce housing in the Global South, according to plural perspectives that take into consideration the inhabitant’s needs and their agency abilities.

This research project aimed to highlight the diversity of hybrid, permeable, evolving commons within space and time.  These commons aim at getting and securing access rights to land and housing and associated services, which often arise from unexpected opportunities.

The research team looked at innovative ways of holding land: commonly held, with a housing function and in a nonspeculative perspective (when the transfer of land is carried out according to a framework decided beforehand by a community, without any capital benefit).

The methodology was based on case studies in developing cities:

• The first phase of the study (2017-2018) led to three field surveys in Burkina Faso, Kenya and India.
• The second phase (2018-2020) consisted of two additional field surveys (Brazil, Mexico), as well as the follow-up of the work carried out in New Caledonia by students in the framework of the School of Urban Affairs (Master’s Degree « Urban Planning Cycle») of Sciences Po Paris.

The team consisted of:

• An academic with authorization to supervise research (HDR), who directed the study;
• A research engineer, who provided the scientific coordination of the study;
• Local researchers specialising in land and urban issues in survey countries.

The study consisted of five phases: documentary research, field research, data processing, drafting of deliverables, valorisation of  research findings. 

This research project resulted in the publication of several research papers:

• “Land-based commons for inclusive cities” (available in French): this research paper presents the conclusions of 8 case studies, focused on securing popular habitat through shared ownership of the land.
• “Does Mexico’s social land still bear commons?” (available in French): Mexican common land has undergone major transformations since the 1990s. This research paper presents the study on the outskirts of the metropolitan area of Mexico City led by the students of the Urban Planning Programme of Sciences Po Paris, under the supervision of Jean-François Valette.
• “Regularizing Rio favelas through land pooling?”: the paper sheds light on an original system of collective land regularization in precarious neighborhoods, which puts into practice the notion of “plural property” running through Brazilian law, and which defends the right of the inhabitants to remain in place.
• “User cooperatives in Uruguay: the challenge of housing as common” (available in Spanish)

The final report of the research project on urban land-based commons for housing in the Global South can be downloaded here.

All the publications and events related to the research project are listed on the following website: Communs fonciers pour l’habitat – Quelle contribution à l’inclusion urbaine dans les Suds ? (hypotheses.org)

"The commons can be understood as a social policy of housing, offering access to housing to the most vulnerable social categories. Moreover, they can provide an alternative path to classical public housing policies which favor individual private property. Indeed, even though these initiatives emerge from dwellers organizations, they might be supported and framed by national governments. Often acknowledged, supported and even presented as standard to be followed, the commons have drawn increased attention recently from dwellers federations, associations, NGOs and international institutions that document their functioning and contribute to the international circulation of these alternative ideas." (Simonneau & Denis, 2021)

Contacts: 

• Claire Simonneau, professor and researcher at Université Gustave Eiffel and researcher at the Laboratoire Techniques, territoires et sociétés (LATTS)
• Stéphanie Leyronas, research officier at AFD