The government has closed the tap on environmental protection spending; funds have fallen 49.4% annually.

Claudia Sheinbaum's administration has cut spending on environmental protection, which saw a sharp decline in the first two months of the year, according to information from the Ministry of Finance and Public Credit (SHCP).

Between January and February of this year, the government allocated 1.246 billion pesos to environmental protection spending, representing a 49.4% drop compared to the same period last year.

This is the largest drop on record since 2007, the date the Treasury Department's statistics date back to.

The drastic contraction in environmental protection spending comes in a year in which the government is seeking to achieve fiscal consolidation and thus reduce Public Sector Financing Requirements (PSFR) from 5.7 to 3.9% of Gross Domestic Product (GDP).

To this end, the government approved various public spending cuts and expects a substantial increase in budget revenue, primarily from tax collection.

“The primary explanation for the drop in this spending is the approved fiscal adjustment. Furthermore, historically, spending on environmental protection has been a low-priority area for the State. During the previous six-year term, this function ceased to be a priority, and in Sheinbaum's first year, this function has a small budget,” said Iván Benumea, coordinator of Fundar's Tax Justice Program.

In this regard, spending on environmental protection—which represents just 0.26% of programmable spending—will suffer a total cut of 5.6% this year compared to the funds approved last year.

Scissors in Conagua

The drop in social protection spending was primarily due to a cut in funding for the National Water Commission (Conagua), which in the period amounted to 2.126 billion pesos, 82% less than the amount spent a year ago.

The adjustment in resources, said Jorge Cano, coordinator of the Public Spending and Accountability Program at México Evalúa, was due to the fact that last year Conagua increased its spending on comprehensive and sustainable water management, as well as on infrastructure for the protection of centers and areas.

"We saw significant spending to promote various supply and waste management projects, and for this year we're seeing an adjustment to bring spending into line with a normal trend. This year's spending is in line with the average for the previous six-year period for the first two months," he added.

Under-exercise

Iván Benumea emphasized that, compared to the budget allocated for the Ministry of Environment and Natural Resources (Semarnat) for the period, an underspending can be observed, meaning that less was spent than approved.

"If you look at the Semarnat calendar, the funds approved for this year should have been around 3.2 billion pesos, which is much more than the total amount spent on environmental protection," he said.

In total, Semarnat spent 2.9 billion pesos in the first two months of the year, 9.3% less than the amount approved for the period.