1. Introduction

During the presidency of Andrés Manuel López Obrador (AMLO), climate policy emerged as one of the most contentious issues facing his administration. Both national and international environmental organizations criticized the government’s neglect and the gradual erosion of Mexico’s climate policy institutions and instruments. A primary critique centered on the administration’s emphasis on fossil fuel extraction and use-directly at odds with Mexico’s statutory greenhouse gas (GHG) reduction targets and international commitments under the Paris Agreement. Beyond the public debate, these policies led to a notable rise in national GHG emissions, which reached an unprecedented peak during this six-year term (see Figure 1).

Source: Prepared by the author, based on Global Carbon Budget 2023, Friedlingstein et al.

Figure 1 National Emissions of Greenhouse Gases 

Against this backdrop, this article explores the tensions between AMLO’s energy policy and the electricity sector transition, along with their implications for climate change mitigation. Although climate policy encompasses both adaptation to adverse impacts and the reduction of GHG emissions in sectors such as transportation, industry, and agriculture, this study focuses on the energy transition within the electricity sector-understood as the transformation of a fossil fuel-based system, in both its technical (sources, technologies, infrastructures) and sociopolitical dimensions (institutions, regulations, markets), into a system reliant on low-carbon energy¹⁰⁴. This focus is justified not only by the electricity sector’s strategic role in emissions reduction, but also by its position at the center of climate controversies during AMLO’s presidency.

Transitioning the electricity sector does more than reducing emissions from power generation itself; it also plays a key role in broader decarbonization by enabling the phaseout of fossil fuels in other sectors. As noted by the Intergovernmental Panel on Climate Change¹⁰⁵, electricity-sector transformation is among the strategies with the highest mitigation potential. For instance, the benefits of electrifying transportation would be limited if the electricity matrix still relied on fossil fuels. Similarly, reducing fossil energy use in industry, commerce, and households facilitates the substitution of natural gas and coal in heating and cooking systems. Consequently, lowered fossil fuel demand reverberates along the entire energy industry value chain-from resource extraction to end use-across multiple sectors that collectively account for 78% of global GHG emissions¹⁰⁶.

Although the rhetoric of energy sovereignty initially centered on the oil industry, the administration’s most controversial decisions took shape within the electricity sector-an especially revealing development. Academic literature typically associates left-wing governments with proactive climate policies, partly because of their ties to environmental movements and their tendency to regulate market externalities¹⁰⁷. Nonetheless, AMLO’s administration defies this expectation and raises a core paradox: why would a left-wing government prioritize the recovery of energy sovereignty over electricity transition, despite national and international mitigation commitments? This question positions the Mexican case as a strategic setting to examine the influence of historical factors-such as the evolution of national energy development-on a left-wing government’s climate policy choices.

Guided by a political economy perspective on climate change and employing process-tracing methodology, this study argues that AMLO’s drive to restore “energy sovereignty” collided with progress in the electricity transition and the pursuit of emission reduction targets. Far from a mere rhetorical clash, this conflict materialized through concrete measures to strengthen the Federal Electricity Commission (CFE), discourage private investment in renewable energy, and prompt litigation by both business groups and environmental organizations. In response, the government followed an institutional escalation strategy that heightened domestic opposition and left a gap in mitigation efforts, ultimately drawing greater international scrutiny.

Nevertheless, the trajectory of AMLO’s energy policy cannot be fully understood without considering external factors. From the outset of Trump’s term, his administration’s climate skepticism and negotiations over the United States-Mexico-Canada Agreement (USMCA) afforded AMLO leeway to refocus national energy policy. Later, the accession of President Joe Biden and growing international pressure, combined with internal opposition, propelled adjustments to Mexico’s energy and climate agenda beginning in 2021. Initiatives such as the Sonora Plan for Sustainable Energy sought to reconcile pressures for climate action with the government’s priority of bolstering the CFE and promoting economic growth. Yet these measures did not resolve deeper contradictions, which reemerged toward the close of the administration.

The remainder of this article proceeds as follows. Section 2 examines the distribution of costs, capacities, and benefits underpinning resistance and setbacks in national mitigation policies. Section 3 describes the process-tracing methodology, highlighting its utility in reconstructing causal links between policy decisions and observed outcomes. Section 4 provides a historical and regulatory overview of Mexican climate policy, laying the groundwork for the case analysis. Finally, Section 5 presents the empirical core of the study, divided into three chronological stages: (i) the initial phase of AMLO’s government and shifts in energy policy (2018-2020), (ii) mounting tensions and climate policy adjustments (2021-2022), and (iii) the balance between climate action and energy priorities at the end of the six-year term (2023-2024). Thus, the study offers a critical perspective on the paradox faced by an emblematic left-wing government-AMLO’s administration-when favoring energy sovereignty over electricity transition, underscoring the historical, political, and international factors at play. It also outlines the implications of this legacy for Claudia Sheinbaum’s incoming administration, furnishing key insights for rethinking Mexico’s future on energy and climate matters amid intensifying domestic and external challenges.

Thus, the study critically examines the paradox confronting a prominent left-wing administration-AMLO’s government-in prioritizing energy sovereignty at the expense of renewable energy transition, highlighting how historical legacies, domestic politics, and international dynamics shaped this controversial trajectory. Furthermore, it outlines the implications for Claudia Sheinbaum’s administration, providing essential insights for rethinking Mexico’s energy and climate future amid increasing domestic and international challenges.

2. The Political Economy of Climate Change

From a political economy perspective, climate change constitutes a global collective action challenge, as both its causes (GHG emissions) and impacts transcend national borders and jurisdictions. In this view, reducing emissions can be understood as a global public good requiring international cooperation. However, emissions reduction yields widely distributed, long-term benefits shared worldwide, while imposing more immediate, localized, and concentrated costs on the actors responsible. Due to this mismatch between who bears the costs and who reaps the benefits, major industries-such as oil, electricity, and automotive-have strong incentives to continue profiting from fossil fuel extraction and consumption, externalizing the consequences of their emissions at a global scale¹⁰⁸. Climate policies directly affect these industries, which are among the most influential in the global economy and thus possess substantial financial and political resources to protect their interests both domestically and internationally¹⁰⁹.

Despite the global scope of climate change, the international system-composed of sovereign states with diverging interests and capacities-constrains coordination¹¹⁰. Although all countries would benefit from cooperating to reduce emissions through a more stable climate and equitable cost-sharing, at the individual level incentives to maintain pollution levels due to uncertainty about others’ behavior remain. This situation can lead to free-riding, whereby actors that do not participate in mitigation efforts profit from those who do, avoiding costs and gaining competitive advantages in international trade¹¹¹. Consequently, without a global climate agreement that firmly commits all parties over the long term-thereby providing certainty about the measures adopted by trading partners and competitors-governments lack incentives to enforce effective climate policies and overcome this collective action dilemma¹¹². Accordingly, such a treaty is crucial to advancing national policies.

Nevertheless, since 1992, negotiations under the United Nations Framework Convention on Climate Change ( UNFCCC) have faced significant challenges due to asymmetries in responsibilities, capabilities, and risks among parties¹¹³. Industrialized countries, including the United States and the European Union (EU) countries, bear greater historical responsibility for GHG emissions. Yet, since the 1990s, these countries have stabilized or lowered their emissions, while the major emerging economies (China, India, Brazil, Russia, South Africa, and Mexico) have substantially increased theirs. As a result, industrialized countries and emerging economies together are the primary contributors to global emissions and possess more financial and technical capacity to reduce them and, paradoxically, to adapt to climate impacts and tolerate a greater temperature increase. In contrast, island nations and less developed countries-despite having both historical and current lower contributions to global emissions-are more vulnerable to climate hazards and possess limited adaptation options. Meanwhile, countries endowed with large fossil fuel reserves and economies reliant on hydrocarbon exports stand to be most adversely affected by the shift to low-carbon technologies, explaining their reluctance to commit to robust international climate action¹¹⁴.

This discussion is crucial for understanding a key feature that distinguishes climate change from other policy arenas: the tight interconnection between international and domestic political processes. UNFCCC negotiations have played a fundamental role in mainstreaming the climate agenda. For instance, the adoption of the Kyoto Protocol catalyzed a wave of national climate policies in numerous countries, whereas domestic opposition in the United States, Canada, Australia, and Russia hindered its implementation, triggering a domino effect that weakened climate action globally¹¹⁵. This pattern repeated in later cycles: post-Kyoto negotiations from 2007 onward stimulated a new round of national policies; more recently, the Paris Agreement spurred a third wave of national commitments and actions¹¹⁶. As a result, domestic policies are typically linked to these multilateral climate commitments, and their continuity is highly sensitive to shifting international political landscapes.

At the national level, mitigation policies and energy transition strategies vary notably due to an array of internal factors driving their adoption and ambition. Environmental organizations stand as the principal champions of the domestic climate agenda. Hence, the density and capacity of these groups, as well as their links to transnational advocacy networks, shape the scope of climate policy¹¹⁷. Likewise, public interest in and awareness of climate issues generate institutional and electoral incentives conducive to adopting mitigation measures. This public engagement is fostered by activists and scholars, along with the domestic effects of extreme events such as hurricanes and droughts¹¹⁸. Moreover, economic blocs and international cooperation organizations-including the OECD, BRICS, and the EU-encourage policy coordination and mitigation objectives among member states and trading partners¹¹⁹. Structural factors, such as a country’s renewable energy potential and the cost-effectiveness of available technologies, also frame a government’s level of ambition¹²⁰.

Nevertheless, the impact of these factors is mediated by the political and institutional framework. For instance, democratic systems enable the operation of environmental organizations and public scrutiny, both of which are critical for formulating national climate agendas. Party-system configurations also affect how these agendas are processed. Pluralist models tend to create openings for environmental movements and facilitate the formation of supportive legislative coalitions, whereas in two-party systems, interest aggregation can accentuate polarization on climate policy¹²¹. Another relevant element is ideological orientation. Right-wing and neoliberal governments typically adopt more conservative positions aligned with economic interests, often leading to less ambitious climate policies and policy reversals. In contrast, left-wing parties tend to endorse progressive, long-term measures that address social and market externalities through state intervention; historically, they have also been closely linked with environmental movements. Consequently, left-wing governments often push for more robust climate agendas, stricter industrial emissions standards, and dedicated public funding for mitigation¹²².

Policy style likewise shapes policy adoption and stability. Command-and-control measures, such as emissions standards and renewable energy mandates, entail direct, mandatory regulations for carbon-intensive industries, thereby affecting their operations and competitiveness. Affected industries may mobilize to veto these policies during the legislative process, and even when approved, these measures can face regulatory volatility and rollbacks. In contrast, market-based instruments-such as cap-and-trade systems, clean energy certificates, and renewable energy auctions-provide greater flexibility for companies to meet requirements, encourage innovation, and potentially reduce compliance costs. They also foster broad advocacy coalitions among government officials, environmentalists, and the private sector by streamlining implementation, facilitating mitigation progress, and expanding business opportunities¹²³. This convergence of interests bolsters political acceptability. Consequently, over the past two decades, market-based instruments have become the dominant paradigm in mitigation policies.

However, this trend-often labeled “climate capitalism”-has faced substantial criticism and calls for environmental justice. Such mechanisms can promote superficial solutions that do not meaningfully reduce emissions. For instance, corporations may use carbon offset schemes to maintain their own emissions while financing mitigation projects elsewhere, frequently in marginalized communities and developing countries¹²⁴. Moreover, an overriding emphasis on maximizing emissions cuts at the lowest cost can overlook broader social and environmental dimensions. One illustration is the proliferation of utility-scale wind and solar plants in rural, marginalized, or Indigenous territories, where land is cheaper. This dynamic has led to land and resource dispossession, disrupted local livelihoods and ecosystems, displaced communities, and provoked conflicts. Consequently, the populations least responsible for, and most vulnerable to climate change may paradoxically gain little from the energy transition yet bear disproportionate burdens from its development¹²⁵. These instruments therefore raise complex questions of equity, environmental justice, and long-term effectiveness.

In light of this, energy transition must go beyond simply replacing fossil fuels with lower-carbon sources and renewables. Energy systems are intricately bound to economic, social, and political structures, meaning that altering their technical compon ents (primary sources, technologies, infrastructures) requires corresponding shifts in institutions, regulations, markets, and planning practices¹²⁶. Nevertheless, the prevailing approach in energy transition policy has largely concentrated on expanding renewables, placing less emphasis on the sociopolitical changes this implies. As a result, policy effectiveness is often undermined, reproducing development models that perpetuate social inequalities and reliance on large energy corporations. Concurrently, alternative pathways-such as distributed systems, community ownership, or self-consumption-remain underexplored¹²⁷. From this vantage, there is a clear need for comprehensive energy transition policies that incorporate sociopolitical dimensions. Furthermore, the very trajectory of this transformation constitutes a contested terrain over environmental justice, energy sector governance, and democratization.

Taken together, this discussion provides an analytical lens for understanding the complexity of climate mitigation and the logic behind actors’ resistance to it. In particular, it highlights three central dimensions for this study. First, the interplay between international climate policy and domestic politics in Mexico, including the influence of UNFCCC negotiations, features of the Paris Agreement, and key actors such as the United States. Second, domestic factors, such as the role of environmental organizations, high-emitting enterprises like the Federal Electricity Commission (CFE), and public perceptions of climate risks. Third, the impact of Mexico’s political and institutional framework, including the government’s ideological orientation and policy style. These dimensions set the stage for analyzing tensions between AMLO’s energy policy and mitigation demands, as explored in the following sections.

3. Methodology

The research design of this study relies on process tracing. Although chronology is central to this method, its purpose goes beyond mere historical description (which, given the rapidly changing energy and climate landscape during AMLO’s six-year term, would be a significant contribution in itself). Instead, the objective is to reconstruct the causal process that links governmental decisions to the outcomes observed in the case¹²⁸. Unlike quantitative approaches aimed at statistical generalization, process tracing focuses on examining the chain of specific decisions and actions that help explain, for instance, how certain policies and reforms by AMLO’s government prompted particular responses from domestic and external actors-such as businesses, environmental groups, and regulators-in the form of litigation, institutional tensions, or gaps in climate policy.

This article adopts the inductive (or explanatory) variant of process tracing. This approach is especially suited to contexts of high complexity and causal heterogeneity, as well as to periods showing substantial changes in key variables-such as the shift in climate policy from the [first] Trump administration to the Biden administration. Under this perspective, the research design follows an iterative procedure, in which collecting and organizing empirical evidence is progressively refined in dialogue with theoretical considerations and event interpretations.

This iterative procedure consisted of three main phases. First, in an inductive phase, the study collected and chronologically organized evidence generated by the main agents, which enabled the identification of critical stages and turning points in the case. Second, the analytical framework of the political economy of climate change was applied to formulate plausible explanations about the relationships between actors, events, and decisions. Third, these explanations underwent validation, refinement, or reformulation by means of: (i) triangulating empirical evidence and (ii) confronting competing interpretations. Through this process, two complementary analytical products emerged: the factual sequence shaping the overall process, and the causal explanations, which-although limited in scope-are backed by empirical data and collectively reconstruct the causal chain¹²⁹.

The empirical work comprised two principal components. First, the study collected, analyzed, and cross-checked primary sources (official statements, legal decrees, interviews, meeting minutes, and stakeholders’ public remarks) and secondary sources (press reports, academic research, and policy documents). This body of evidence enabled the reconstruction of key events, and the positions of the main actors involved. Second, to assess the concrete effects of the policies beyond public discourse, the study examined the evolution of indicators such as emission levels, investments, and installed capacity. This analysis relied primarily on official data; however, given discrepancies and gaps in historical records, additional information was requested via Mexico’s National Transparency Platform from the Federal Electricity Commission (CFE), the National Energy Control Center (Cenace), the Ministry of Energy (Sener), and the Energy Regulatory Commission (CRE), yielding only partial and restricted datasets. Consequently, the study supplemented these requests with open-access databases-such as the Global Carbon Budget¹³⁰, Climate Action Tracker¹³¹, and the World Bank¹³². Cross-referencing these diverse sources facilitated a robust reconstruction of the causal mechanisms explaining how and why AMLO’s energy policies led to the tensions and outcomes discussed in Section 5.

4. From Reluctance to Leadership: Mexico’s Evolving Climate Policy

Since the 1990s, Mexico has undergone a significant evolution in its approach to climate change, moving from initial reluctance to a more proactive stance. In 1991, during the inaugural meeting to draft the United Nations Framework Convention on Climate Change (UNFCCC), countries such as Denmark, the Netherlands, Sweden, and Germany supported a protocol mandating binding mitigation commitments. This proposal met strong resistance from oil-exporting nations, emerging economies with growing energy demands, and industrialized countries benefiting from low-cost fossil fuels-namely the United States, Canada, and Australia¹³³. In these negotiations, Mexico was wary of assuming new obligations due to domestic considerations: the potential repercussions for its economic development, limited institutional capacity on environmental matters, and a marked dependence on fossil fuels¹³⁴. As the world’s fourth-largest oil producer-Petróleos Mexicanos (Pemex) contributed nearly one-third of public revenues and the electricity sector relied heavily on fossil fuels-Mexico aligned with the United States and others opposing additional mitigation commitments¹³⁵.

Despite these reservations, Mexico signed the UNFCCC at the landmark 1992 Rio Earth Summit. This agreement constituted a milestone, recognizing: (i) the responsibility of human-generated GHG emissions in driving climate change, (ii) the urgency of reducing global emissions to 1990 levels, and (iii) the importance of addressing climate action under the principle of common but differentiated responsibilities. Consequently, industrialized countries and those emerging from the former Soviet Union committed to leading global mitigation efforts, while developing countries such as Mexico agreed to report on their emissions and advance domestic policies. The Conference of the Parties (COP) was also established to oversee implementation of the UNFCCC¹³⁶.

Following the Rio Summit, Mexico undertook a series of institutional reforms to meet its new obligations. President Carlos Salinas’s administration created the National Institute of Ecology (Instituto Nacional de Ecología, INE) to foster research and provide technical support on climate-related matters. Meanwhile, the signing of the North American Free Trade Agreement (NAFTA) in 1994 and Mexico’s integration into the Organization for Economic Cooperation and Development (OECD) prompted the harmonization of national environmental regulations with international standards, strengthening environmental legislation overall. This context also encouraged the expansion and diversification of environmental organizations in Mexico. Building on these developments, when Ernesto Zedillo took office in 1994, he established the Ministry of Environment, Natural Resources, and Fisheries (Semarnap), consolidating federal responsibilities in environmental policy and elevating its public profile¹³⁷.

With the UNFCCC in force, COP-1 in Berlin (1995) set out to adopt a protocol for coordinating emissions reductions by 1997. Mexico faced pressure to assume mitigation commitments, given its membership in the OECD, as well as its income and per capita emissions levels, which exceeded those of other emerging economies. Although this issue was not a primary focus of negotiations, it influenced the Mexican delegation-led by the Ministry of Foreign Affairs (Secretaría de Relaciones Exteriores, SRE) and Semarnap-who concluded that the country should soon be prepared to accept mitigation responsibilities¹³⁸. At COP-3 in 1997, the Kyoto Protocol introduced the first period of mandatory emissions reductions for industrialized nations and economies in transition, targeting a 5% cut relative to 1990 levels. It also created the Clean Development Mechanism (CDM), granting some flexibility in meeting targets through mitigation projects in developing countries¹³⁹.

Although the Kyoto Protocol did not impose direct obligations on Mexico, declining U.S. demand for oil could harm Pemex exports, and Mexico’s economic and energy ministries initially opposed ratification. Nevertheless, Semarnap and SRE advocated for Mexico’s involvement and convinced President Zedillo of the importance of preparing the country to assume formal mitigation commitments, suggesting that the CDM could defray the associated costs. Eventually, in 2000, Mexico ratified the Kyoto Protocol. However, when the United States withdrew in 2001 under the Bush administration, the Protocol’s implementation-and the CDM’s financing mechanism-was severely undermined, affecting key funding sources for Mexican mitigation projects¹⁴⁰.

Under President Felipe Calderón (2006-2012), Mexico took on a leading role in UNFCCC negotiations and made notable progress in climate policy and energy transition. From the beginning of his term, Calderón advocated for Mexico’s participation in the Bali Action Plan Working Groups, outlining the path to negotiate a treaty following the expiration of the Kyoto Protocol’s at the end of 2012. These discussions revealed tensions between industrialized countries-seeking broader mitigation commitments from emerging economies-and China, India, Brazil, and South Africa, who insisted on differentiated responsibilities¹⁴¹. Navigating a middle ground, Mexico was open to mitigation targets that were proportional and voluntary.

In parallel, the 2008 Special Climate Change Program set voluntary mitigation objectives for 2012 and 2030, including targets for the energy transition. To support these goals, the 2008 Law for the Use of Renewable Energy and Financing of Energy Transition (Ley para el Aprovechamiento de Energías Renovables y el Financiamiento de la Transición Energética, LAERFTE) aimed to advance renewable electricity generation by tackling legal and technical obstacles. The law (i) enabled private projects under a self-supply scheme between consumers and renewable energy companies, (ii) mandated preferential dispatch for power generated by renewables, and (iii) provided legal certainty for interconnection and transmission contracts. Further reforms in 2012 established the General Climate Change Act, including mitigation targets of 30% by 2020 and 50% by 2050, along with the National Climate Change System to coordinate actions among ministries and levels of government. Despite these advances, large-scale wind projects in the isthmus of Tehuantepec provoked local opposition from Huave and Zapotec communities, leading to social conflict near the end of Calderón’s term.

Under Enrique Peña Nieto (2012-2018), the 2013 Energy Reform amended Articles 25, 27, and 28 of the Constitution, deepening private involvement in the energy sector¹⁴². Subsequently, the 2014 Electricity Industry Act (Ley de la Industria Eléctrica, LIE) created markets for electricity generation and marketing and reorganized the Federal Electricity Commission (Comisión Federal de Electricidad, CFE) into a structure akin to private firms. The LIE also introduced Clean Energy Certificates (Certificados de Energías Limpias, CELs) and an auction mechanism for the purchase of electricity, capacity, and CELs.

Ahead of COP-20, the Energy Transition Act (Ley de Transición Energética, LTE) was presented to Congress to replace the LAERFTE, aiming to regulate the sustainable use of energy and promote an energy transition. This law established specific targets to reduce dependence on fossil fuels and gradually expand the share of clean energy in electricity generation: 25% by 2018, 30% by 2021, and 35% by 2024. These objectives tied CEL obligations to power producers and large consumers, thus incentivizing clean-energy investment. Carbon-intensive industries initially lobbied against the initiative in Congress, delaying its passage.

Nevertheless, pressure from environmental NGOs, public opinion, and U.S. diplomacy under the Obama administration propelled approval of the LTE during negotiations for the Paris Agreement in 2015¹⁴³. Under the Agreement, all UNFCCC parties must define their climate commitments through Nationally Determined Contributions (NDCs) and gradually increase ambition in five-year cycles, adhering to the principle of progressivity, until collective mitigation is aligned with the goal of keeping global warming below 2°C-or ideally at 1.5°C. In its NDC, Mexico pledged to cut GHG emissions by 25% by 2030, and to generate 35% of its electricity from clean sources by 2024 and 45% by 2030¹⁴⁴. National regulations, through CELs and Renewable Energy Auctions, underpinned these commitments.

During the Calderón and Peña Nieto administrations, therefore, wind and solar energy deployment grew significantly. However, this did not necessarily entail comprehensive planning for an energy transition. Both the LAERFTE and the LIE emphasized private investment attraction without establishing a robust institutional framework for long-term planning, transmission network modernization, or substantial community involvement. Consequently, although clean energy investment and installed capacity increased notably, these developments did not trigger a systemic transformation of the electricity sector-leaving important gaps in equity, governance, and climate justice.

This historical overview serves a dual purpose: it provides the context for understanding the policies and regulations predating AMLO’s government and illustrates how the analytical factors discussed in Section 2 materialized on the ground. Mexico’s climate policy evolution, for instance, highlights the interplay between international negotiations and domestic reforms. Each cycle of UNFCCC negotiations-from the Kyoto Protocol to the Paris Agreement-corresponded to significant changes at home. U.S. administrations, ranging from Bush’s pullback to Obama’s leadership, also shaped the pace and scope of Mexico’s climate agenda. Moreover, institutions and interests in the energy sector played a pivotal role at critical junctures. Finally, environmental organizations and the private sector-initially mere bystanders-grew into active participants in policy formation and execution. This intricate matrix of institutions, laws, and interests would form the starting point from which AMLO’s administration would frame its vision of energy sovereignty and respond to Mexico’s climate commitments.

5. AMLO: Between Energy Sovereignty and the Global Thermometer

5.1 Change of Course

Andrés Manuel López Obrador’s (AMLO) accession to the Mexican presidency in 2018 signaled a substantive shift in the country’s energy policy, guided by his vision of “energy sovereignty.” In this subsection, I argue that two international factors-the Trump administration’s adversarial stance on climate policy and provisions in the newly negotiated United States-Mexico-Canada Agreement (USMCA)-together paved the way for this turn in Mexico. On one hand, these factors weakened the climate agenda in North America, and on the other, they granted Mexico additional latitude to reorient its domestic energy policy. In this context, AMLO’s government prioritized strengthening Petróleos Mexicanos (Pemex) and the Federal Electricity Commission (Comisión Federal de Electricidad, CFE) at the expense of private sector participation in electricity generation. This new course of action particularly affected the renewable energy sector, which until then had largely relied on private investment and market mechanisms championed by previous administrations. As a result, while the government did not abandon the rhetoric of energy transition and emissions reduction, in practice these objectives were subordinated to the broader agenda of state-led energy policy and consolidation of CFE.

Donald Trump’s election as president of the United States in 2016 marked a stark departure from the trade and climate change strategies of his predecessor, Barack Obama. The Obama administration had enacted ambitious measures for GHG mitigation, particularly the Clean Power Plan (2015), which promoted energy efficiency and zero-emission renewables to reach 21% of U.S. electricity generation by 2030¹⁴⁵. In foreign policy, Obama channeled technical and financial resources through USAID to support climate policies in key partner nations such as Mexico and Brazil. Meanwhile, U.S. diplomacy, led by Secretary of State John Kerry, played a critical role in finalizing the Paris Agreement¹⁴⁶.

In contrast, from his election campaign onward, Trump labeled climate change a Chinese hoax designed to undermine the U.S. economy¹⁴⁷. Upon taking office in January 2017, he surrounded himself with executives from major oil, gas, and coal firms, and in the first months of his presidency, issued executive orders to rescind the Clean Power Plan and roll back methane emission regulations for hydrocarbon production and distribution. Then, in June 2017, Trump declared the U.S. withdrawal from the Paris Agreement¹⁴⁸.

Simultaneously, Trump threatened to terminate the North American Free Trade Agreement (NAFTA), arguing that it had unfairly benefited Mexico by creating a U.S. trade deficit and job losses in emblematic industries such as automobile manufacturing. In response, Canada and Mexico-then still under President Enrique Peña Nieto (EPN)-entered an uncertain renegotiation process in August 2017. Canada and Mexico pushed for explicit references to the Paris Agreement and clean energy provisions in the new trade deal, yet the Trump administration, aligned with major fossil fuel interests, resisted these measures on grounds of competitiveness.

In this context, AMLO’s victory in Mexico’s 2018 elections, heading a coalition led by the National Regeneration Movement (Morena), also influenced the trade negotiations. During his campaign, AMLO capitalized on public dissatisfaction by promising a profound transformation centered on government austerity, anti-corruption efforts, and poverty reduction. Although his political platform acknowledged climate change and renewable energy development¹⁴⁹, these issues were secondary to the goal of reasserting state control in the energy sector and fortifying Pemex and CFE-objectives rooted in AMLO’s political background.

During the transition period, EPN’s outgoing administration granted AMLO, as president-elect, considerable leeway to shape policy. AMLO appointed Jesús Seade to represent him in the NAFTA renegotiation, in which Seade advocated for the incoming government’s energy sovereignty priorities. This stance clashed with the openness to private investment championed by the 2013 energy reform, prompting unease among U.S. and Canadian negotiators intent on securing equitable market access for their energy firms.

Ultimately, the USMCA, signed on November 30, 2018, contained only limited references to climate change and did not set any specific commitments in that domain. Chapter 8 of the USMCA explicitly recognizes Mexico’s sovereignty over its hydrocarbons and its authority to reform its Constitution and energy laws, provided such changes do not violate other treaty provisions or infringe upon the rights of the other parties¹⁵⁰. The agreement also outlines multiple mechanisms for dispute resolution, including those for interstate trade disputes and conflicts related to foreign investment in the energy sector¹⁵¹. In effect, the USMCA diminished the momentum for climate collaboration in North America and simultaneously opened the door to further reforms of Mexico’s energy sector.

Seizing this opportunity, President AMLO placed transformation of energy policy at the forefront of his agenda, focusing on two main objectives: repealing the 2013 energy reform to reassert state authority, and strengthening the national energy industry, particularly Pemex and CFE. In line with this vision, on December 8, 2018-just days into his presidency-AMLO, joined by CFE director Manuel Bartlett, presented the National Electricity Program¹⁵², clearly signaling a shift in policy priorities toward restoring CFE’s leadership and expanding its role in electricity generation.

This approach stood in stark contrast to the reforms pursued by previous governments. Since the 1990s, Mexico had encouraged private sector involvement in electricity generation to meet rising demand, given the CFE’s budgetary constraints. Initially, the 1992 electricity reform¹⁵³ opened generation to private investment under various schemes, such as independent power producers (IPPs), spurring investment in combined-cycle plants¹⁵⁴. In 2008, the Use of Renewable Energy and Financing of the Energy Transition Act (LAERFTE) further incentivized private renewable projects via self-supply arrangements, driving development of wind energy. Finally, the 2013 energy reform and the 2014 Electricity Industry Act (LIE) fully liberalized generation and marketing activities, introducing electricity auctions to procure power, capacity, and Clean Energy Certificates (CELs), thus attracting significant investment in solar photovoltaic and wind projects (see Figure 2).

Source: Prepared by the author, based on Ferrari et al. n.d. and Sener 2023.

Figure 2 Energy Generation by Type of Technology and Owner 

In contrast, AMLO’s National Electricity Program aimed to increase the CFE share of national electricity generation, which had fallen from 100% to 54% between 1999 and 2018¹⁵⁵. This entailed rehabilitating and maximizing output from existing CFE plants and expanding the agency’s generation capacity. Although the program included developing CFE-owned clean energy facilities (hydroelectric, geothermal, and nuclear), it also proposed the strategic use of all of Pemex’s primary resources, including fossil fuels and cogeneration from refinery steam. Unsurprisingly, observers raised concerns over potential impacts on the energy mix transition.

Aligning with this new direction, the National Energy Control Center (Centro Nacional de Control de Energía, Cenace) canceled the fourth electricity auction on January 31, 2019¹⁵⁶. This decision signaled a break from EPN’s energy transition policy. Between 2015 and 2017, three long-term auctions had assigned contracts for 7518 megawatts (MW) across 90 projects-mostly wind (58%) and solar PV (38%), as well as some geothermal, hydroelectric, bioenergy, and efficient cogeneration (4%)-representing over USDls 9 billion in investments¹⁵⁷. Mexico’s low-cost renewable bidding prices and high capital inflows had placed it among the top 10 nations for renewable investment¹⁵⁸. Consequently, the country’s renewable capacity rose from 16.4 MW in 2015 to 20.4 MW in 2018, with contracted projects potentially surpassing 30 GW by 2022¹⁵⁹. Suspension of the fourth auction brought uncertainty regarding ongoing contracts and the country’s mitigation commitments.

CELs had been granted to facilities installed since 2014 to spur new investment. Under that framework, CFE was the main buyer of CELs due to its aging plants and limited share of clean energy. However, new rules issued CELs to CFE for its hydroelectric, geothermal, and nuclear plants, reducing its need to purchase them externally¹⁶⁰ and, in turn, lowering overall demand. As a market instrument, CEL values hinged on supply and demand, so renewable companies and industry associations (e.g., the Mexican Wind Energy Association, the Mexican Solar Energy Association) opposed the measure, claiming that project viability-and the electricity price they offered-depended on revenue from CEL transactions¹⁶¹.

Environmental organizations reacted with concern but did not voice strong opposition. Under EPN, groups such as Greenpeace, World Wildlife Fund, Mexico Climate Initiative, and the Mexican Center for Environmental Law (Cemda) had already criticized the overly commercial approach to renewables and the lack of community engagement. In response, the LIE had introduced Social Impact Assessments to reduce local adverse effects and Indigenous Consultations to ensure prior consent from indigenous communities-intending that developers would internalize social impacts. Yet implementation remained uneven, and certain auctions continued to award large-scale projects, such as Vega Solar in indigenous territories of the Yucatán peninsula and the isthmus of Tehuantepec, despite community opposition¹⁶².

Consequently, many environmental organizations believed that the renewables development model required revision to foster a just energy transition-one that would meaningfully involve local communities in decision-making and benefits. Thus, they expected the AMLO government to recalibrate the model, balancing private investment objectives with social considerations, and to promote alternative approaches such as distributed generation, community partnerships, and public investment.

Some support for this approach emerged with the appointment of Víctor Toledo as Secretary of the Environment and Natural Resources (Semarnat) in May 2019, following Josefa González-Blanco Ortiz-Mena’s brief six-month term. Toledo, an academic researcher in ecology and environmental management, maintained ties with environmental organizations and leftist factions, enabling him to engage with key social actors. Unlike most cabinet officials, who had low public profiles, Toledo visibly advocated strengthening clean energy and proposed a national energy transition plan emphasizing local development, self-consumption, and cooperatives¹⁶³.

However, tensions between energy and climate policy soon intensified due to the COVID-19 pandemic. Lockdowns and global recession slashed industrial activity and transportation, collapsing oil prices and reducing electricity demand, especially in industrial and commercial sectors. Naturally, Mexico was also affected, as Pemex faced major financial challenges and the government’s revenue declined, while domestic demand for electricity dropped (see Figure 3).

Source: Prepared by the author, based on Cenace 2024. Note: Weekly Average by Balance.

Figure 3 Estimation of Energy Demand in the Mexican National Electric System. 

In April 2020, Cenace issued an Agreement for Ensuring Efficiency, Quality, Reliability, Continuity, and Security of the National Electricity System¹⁶⁴, halting preoperational tests for 17 solar and wind projects-nine of which held CFE-awarded contracts-and stipulating that no new authorizations would be granted to plants yet to begin such tests. Cenace justified the measure as “necessary to utilize the safest energy generation sources to avoid blackouts and supply failures” in order to “mitigate the drop in electricity demand due to the coronavirus pandemic and protect grid reliability”¹⁶⁵.

Shortly thereafter, on May 15, 2020, the Ministry of Energy (Sener) issued the Policy on Reliability, Security, Continuity, and Quality in the National Electricity System, granting priority dispatch to CFE plants over renewable generators¹⁶⁶. In response, environmental groups spoke out against the government’s intention to use Pemex refinery fuel oil in polluting CFE plants.

At this juncture, Canada and the European Union formally opposed these measures, as they undermined clean energy investments already underway¹⁶⁷. Environmental organizations such as Greenpeace and Cemda, as well as affected investors, filed over 170 legal injunctions (amparos), and the Federal Economic Competition Commission challenged the new policy’s constitutionality in Mexico’s Supreme Court of Justice¹⁶⁸. The courts granted these injunctions, and eventually the Supreme Court invalidated most of the policy.

This conflict further strained relations between the government and environmental organizations. Meanwhile, Semarnat’s influence waned, reflected in severe budget cuts in 2020 that sharply limited its operational capacity. Tensions peaked in August 2020 with Víctor Toledo’s resignation after he publicly criticized the so-called “Fourth Transformation,” marking the second change in the environment ministry’s leadership in under two years¹⁶⁹ and revealing the administration’s limited commitment to environmental and climate policy.

The first international repercussions emerged in December 2020 when Mexico presented an update to its first Nationally Determined Contribution (NDC) from 2016¹⁷⁰. National and international environmental organizations condemned the new NDC as less ambitious than the original and lacking transparency. Notably, it raised the baseline scenario for 2030 emissions without clarifying underlying assumptions, effectively allowing higher absolute emissions while maintaining the same percentage reduction¹⁷¹. Thus, even though mitigation targets from the earlier NDC remained nominally intact, in practice they were weaker and contradicted the Paris Agreement’s principle of “progressivity,” whereby each new NDC should represent successively stronger climate commitments (see Table 2).

In short, the 2018-2020 period marked a significant shift in Mexico’s energy and climate policy. Measures undertaken to reinforce Pemex and CFE in line with AMLO’s energy sovereignty vision had substantial repercussions. Domestically, the reorientation of energy policy spurred lawsuits, legal uncertainty, opposition from affected firms, and tensions with environmental groups. The COVID-19 pandemic magnified these dynamics by driving measures that favored CFE more decisively while restricting both existing renewable operations and new renewable projects.

5.3 The Twilight of the Administration and Contradictions of Climate Action

Between 2023 and 2024, President Andrés Manuel López Obrador (AMLO) adjusted his climate policy, achieving concrete advances in the electricity sector transition. The development of the CFE’s Puerto Peñasco photovoltaic plant and the launch of the Sonora Plan showcased both the technical and economic feasibility of clean energy and the potential to reconcile its expansion with energy sovereignty. In this section, I argue that these gains were offset by the urgent push to restore CFE’s dominance in electricity generation before the end of the six-year term, aiming to secure this achievement as part of AMLO’s historic legacy. This short-term priority triggered a range of measures-such as acquiring combined cycle power plants and drafting a new constitutional reform proposal-that ultimately produced contradictory, and in some cases adverse, repercussions on emissions mitigation goals.

By early 2023, the Sonora Plan emerged as the linchpin of AMLO’s mitigation strategy. With an estimated investment of USD 7 billion, the plan rested on two main pillars: (i) constructing a CFE-owned photovoltaic facility in Puerto Peñasco, split into two phases (the first inaugurated in 2023 at 120 MW, the second slated for 2024 adding 320 MW), and (ii) exploiting a lithium deposit in Bacadéhuachi, Sonora, through the newly created decentralized entity LitioMx¹⁹⁸. The plan also encompassed initiatives to foster innovation and technological development, including science parks and specialized professional training in key engineering and knowledge fields essential for the clean-tech industry.

With the Sonora Plan, the government sought to reconcile seemingly competing objectives: (1) implementing tangible measures for the energy transition, (2) maintaining state control and CFE involvement in this emerging sector, and (3) leveraging the economic and political benefits of closer alignment with the Biden administration’s climate agenda. For instance, the Puerto Peñasco photovoltaic plant contributed to clean power generation while bolstering CFE’s role, and lithium extraction would enable the growth of clean-tech industries in North America, simultaneously ensuring the State’s pivotal role in managing this critical resource.

The Sonora Plan’s emphasis on electromobility and renewables merits special attention. It closely tracked U.S. trade and climate objectives aimed at speeding up the shift to these technologies while cutting reliance on Chinese industry¹⁹⁹. Consequently, the Plan dovetailed with “nearshoring” strategies by attracting private capital to produce solar panels, lithium batteries, and other vital components, positioning Sonora as a regional hub exporting to the U.S. market.

In parallel, AMLO’s administration maintained its commitment to reestablishing CFE’s primacy in electricity. On April 4, 2023, officials announced the purchase of 12 combined cycle plants and a wind farm from Iberdrola in Mexico, adding 8,539 MW of generation capacity. Valued at approximately USD 6.2 billion, this deal was forecast to raise CFE’s share in the national electricity matrix from 39% to 55% (see Figure 4)²⁰⁰. However, it also highlighted contradictions in the government’s notion of energy sovereignty.

Source: Prepared by the author, based on Sener 2015.Sener 2016. Sener 2017. Sener 2018b. Sener 2019. Sener 2022. Sener 2023. Sener 2024.

Figure 4 Proportion of Energy Generation by Type of Owner 

Analysts and environmentalists cautioned that although the acquisition boosted CFE’s share, it did not expand overall installed capacity. Moreover, while the transaction ostensibly served energy security and sovereignty, critics noted a paradox: the newly acquired combined cycle plants still relied on imported natural gas from the United States²⁰¹. Skeptics argued that given a constrained public budget, these funds might have been more effectively allocated to building new CFE renewable facilities, thereby mitigating the drop in private investment in clean technologies during AMLO’s term (see Figure 5). Such an alternative could have helped meet growing electricity demand, harness abundant domestic renewable resources, and more directly bolster sovereignty and modernization of CFE.

Source: Prepared by the author, based on World Bank n.d. Note: Values constant to 2018; projects with at least 20% private participation.

Figure 5 Electricity Generation Investment in Mexico 

Against this backdrop, Mexico’s participation at COP28-held November 30 to December 12, 2023, in Dubai, United Arab Emirates-reinforced the country’s emerging climate agenda. On one hand, Mexico joined a historic consensus calling for a “transition away” from fossil fuels for the first time in COP history and backed an agreement to triple global renewable capacity by 2030, implying a significant scale-up of these technologies in the coming decade²⁰². Simultaneously, the Mexican delegation showcased progress under the Sonora Plan, highlighting its substantial potential for solar energy and lithium exploitation, as well as favorable international conditions for positioning Mexico as a strategic hub of clean-tech industries. As a result, the Sonora Plan garnered notable interest from climate finance sources and international investors²⁰³.

Only weeks after COP28, legal uncertainty reemerged as a barrier to the private investment necessary to consolidate the Sonora Plan. On January 31, 2024, Mexico’s Supreme Court of Justice (SCJN) declared the 2021 LIE unconstitutional, ruling that its dispatch priority unjustly favored CFE and contravened constitutional principles of fair competition and free markets²⁰⁴. This decision not only overturned the LIE reform underpinning CFE’s strengthened role but also cast doubt on AMLO’s energy policy legacy beyond his presidency.

In the wake of this judicial blow, on February 5, 2024, President López Obrador introduced a package of 20 constitutional reforms, tying them to the electoral campaigns that would shape his succession²⁰⁵. Approving these reforms required the governing coalition to secure a two-thirds majority in both legislative chambers during the June 2, 2024, elections-effectively making them a campaign platform. Among the proposals, the most prominent concerned strategic state industries, seeking to amend Articles 25, 27, and 28 of the Constitution. More sweeping than the 2021 electricity constitutional proposal, this new initiative called for eliminating the concept of “state productive enterprise” and restoring CFE as a purely public company tasked with guaranteeing energy security and self-sufficiency. It also aimed to enshrine state control over the national electricity system and ensure the primacy of the public utility over private players²⁰⁶. Despite its far-reaching scope, however, the plan did not outline how the government would create incentives and conditions for an effective shift to renewable energy. Once again, the unresolved tension between Mexico’s urgent climate challenges and AMLO’s energy policy-a core contradiction-underlined the legacy that would define the final phase of his term.

6. Conclusion

The López Obrador administration’s energy policy was guided by the principle of recovering energy sovereignty, primarily understood as reinforcing the predominance of the Federal Electricity Commission (CFE) over private actors and reestablishing state control of the national electricity system. This stance diverged sharply from the policies of preceding governments, which had promoted the expansion of renewables through private investment and market-based mechanisms. It is unsurprising, therefore, that measures such as auction cancellations faced opposition from affected companies and environmental organizations, sparking litigation that disrupted their implementation.

Over the six-year term, three major phases emerged. First, a shift in direction (2018-2020) characterized by a sovereigntist turn and a vacuum in climate policy; second, a period of escalating tensions (2021-2022), in which legal reforms prompted stronger domestic and diplomatic opposition; and finally, the administration’s last stretch (2023-2024), marked by partial reconciliation efforts-exemplified by the Sonora Plan-that did not fully resolve the deeper contradictions. This trajectory unveiled a negative feedback loop: each new official measure heightened resistance, culminating in domestic uncertainty and international scrutiny. Despite certain adjustments near the end of 2022 to address mitigation commitments, the government’s vision of energy sovereignty continued to favor fossil fuels and slow the expansion of renewables, resulting in a resurgence of national GHG emissions.

The Mexican case also underscores the substantial impact of external factors, notably the political dynamics of the United States under the Trump and Biden presidencies. Developments such as the renegotiation of the USMCA and U.S. climate diplomacy shaped President López Obrador’s energy agenda, initially providing leeway yet ultimately pressuring Mexico to make partial policy modifications. These narrative challenges prevailing assumptions about a straightforward link between left-wing governments and more ambitious climate policies. AMLO’s experience suggests that beyond ideology, the historical trajectory of the energy sector and the symbolic and political value of the fossil fuel industry are decisive. More broadly, this study reveals the need to rethink-and possibly redefine-energy sovereignty in light of the global climate crisis. Accordingly, a new paradigm must place clean energy at the center of energy security, supported by effective state stewardship that fosters innovation, social inclusion, and emission reductions.

Looking ahead, the incoming administration of Claudia Sheinbaum will inherit the complexities left by López Obrador and face the urgent task of accelerating Mexico’s energy transition. The backdrop is even more critical given Donald Trump’s second term, characterized by policies running counter to climate action and intensifying trade tensions-both of which will shape the bilateral agenda and constrain the new government’s fiscal latitude. In this context, the challenges are formidable: modernizing and decarbonizing CFE’s plants, implementing constitutional reforms in the energy sector, resolving outstanding litigation, and reestablishing Mexico’s role in international climate collaboration. Achieving these objectives will require strengthening CFE’s technical, financial, and organizational capacities; devising innovative public-private partnership models; maintaining constructive dialogue with organizations, communities, and investors; and enhancing long-term strategic planning tools. Only through determined commitment and a forward-thinking vision can Mexico effectively meet the demands of climate change mitigation and confront the unavoidable obstacles to energy stability and security in an increasingly uncertain economic and geopolitical landscape.