Spatial analysis of CO₂ emissions and their relationship with
economic activity in the states of Mexico

Abril Yuriko Herrera-Ríos

yurikoherrera@uas.edu.mx 0000-0001-9301-9285

Facultad de Ciencias Económicas y Sociales, Universidad Autónoma de Sinaloa, Ciudad Universitaria, Blvd. Universitarios, Avenida de las Américas, Unidad 3, s/n. 80010 Culiacán - Sinaloa, México.

KEYWORDS

Spatial econometrics

CO₂ emissions

Spatial error model

INTRODUCTION

Climate change represents one of the greatest global challenges of the 21st century, with significant impacts on natural and socioeconomic systems. Greenhouse gas (GHG) emissions, particularly carbon dioxide (CO₂), are recognized as major contributors to global warming. Global CO₂ emissions from human activity reached 36.3 gigatonnes in 2021, according to data from the Global Carbon Project. This level of emissions reflects a post-pandemic economic recovery but also underscores the persistent dependence on fossil fuels.

At the national level, Mexico is one of the leading emitters of GHG in Latin America, with approximately 440 million tonnes of CO₂ emitted in 2021, according to the National Institute of Ecology and Climate Change (INECC, for its acronym in Spanish) (Instituto Nacional de Ecología y Cambio Climático, 2022). These emissions are closely linked to economic activity, as sectors such as transport, electric power generation and the manufacturing industry are responsible for a substantial part of the national total. Furthermore, the emissions pattern in Mexico presents significant geographic heterogeneity, reflecting the differences in the distribution of economic and industrial activities between states.

On the other hand, environmental and economic literature has widely discussed the relationship between economic growth and CO₂ emissions. While developed countries have made progress in decoupling economic expansion from emissions through technological innovation and policy interventions, developing economies continue to exhibit a strong correlation between GDP growth and increased emissions.

This issue is particularly relevant in Mexico, where economic and environmental disparities across regions create spatial heterogeneity in emissions. Industrialized states like Nuevo León and the Estado de México generate significantly higher emissions than less developed regions like Chiapas and Oaxaca. Despite Mexico’s commitment to international climate agreements such as the Paris Agreement, the country faces substantial challenges in reducing greenhouse gas emissions while sustaining economic growth. This research contributes to understanding these challenges by applying a spatial econometric approach to examine CO₂ emissions across Mexican states.

The primary objective of this study is to analyze the spatial distribution of CO₂ emissions in Mexico and their relationship with economic activity. Specifically, the research seeks to identify spatial patterns in emissions, examine the correlation between Gross State Domestic Product (GSDP) and CO₂ emissions, evaluate potential spillover effects where emissions in one state influence those in neighboring states, and provide insights for policymakers on how regional economic structures impact environmental sustainability. To achieve these objectives, official data sources were used, including emissions data from the National Institute of Ecology and Climate Change (INECC) and economic indicators from the National Institute of Statistics and Geography (INEGI). Additionally, demographic and spatial variables were incorporated to capture regional economic activity and population density differences.

METHODOLOGY AND DATA

The data used come from official sources and were selected for their relevance to the analysis:

• CO₂ emissions (2022): Calculated based on the energy consumption reported by the Ministry of Energy (SENER, for its acronym in Spanish) and the emission factor provided by the RENE calculator (https://www.gob.mx/inecc/acciones-y-programas/registro-nacional-de-emisiones-rene-17015).
• State Gross Domestic Product (GDP, 2022) Obtained from the National Institute of Statistics and Geography (INEGI).
• State population (2022): Reported by the National Population Council (CONAPO).
• Spatial data: Extracted from the Geostatistical Framework of the 2020 Population and Housing Census shapefile, published by INEGI.

The integration of economic and demographic data with spatial information was carried out using the standard geographic key (NOMGEO). Subsequently, a spatial neighborhood matrix was generated using the Queen Contiguity criterion with the spdep library in R, allowing modeling of spatial interactions between neighboring states.

The methodological approach employed in this study is based on spatial econometric techniques. First, a spatial exploratory analysis was conducted using Moran’s I statistic to measure spatial autocorrelation in emissions, allowing the identification of clustering patterns. The Local Indicators of Spatial Association (LISA) methodology was then applied to generate maps visually representing regions with high and low emissions. Following the exploratory analysis, a Spatial Error Model (SEM) was implemented to examine the relationship between economic activity and CO₂ emissions while accounting for spatial dependence. This model controls for additional variables such as population size and industrial density to isolate the impact of economic factors on emissions.

RESULTS

The results reveal several key findings. First, there is strong spatial dependence on emissions across Mexican states. Moran’s I and LISA maps confirm that emissions are not randomly distributed but exhibit clustering, particularly in highly industrialized states. Second, the SEM model results indicate that economic activity, as measured by GSDP, is a significant determinant of CO₂ emissions. This finding confirms that as economic output increases, so do emissions, reinforcing the traditional environmental concern that economic growth may come at an ecological cost. Third, the study provides evidence of spillover effects, showing that states with high emissions tend to influence emissions levels in neighboring states.

This suggests that emissions are not solely a local issue but a regional phenomenon requiring coordinated policy responses. Lastly, the study highlights significant regional disparities in emissions. While industrialized states in northern and central Mexico, such as Nuevo León and the Estado de México, exhibit the highest emissions levels, southern states, such as Chiapas and Oaxaca, maintain lower emissions, primarily due to their lower levels of industrial activity. These findings align with global patterns observed in other developing economies, where industrial hubs tend to have higher environmental footprints due to increased energy consumption and production activities.

In discussing these results, it is essential to place them within the broader literature on economic growth and environmental sustainability. The findings are consistent with previous research supporting the Environmental Kuznets Curve (EKC) hypothesis, which suggests that economic development initially leads to increased emissions before stabilizing at higher income levels. However, Mexico has not yet reached this turning point, indicating that additional policy interventions are needed to achieve sustainable growth.

The study also compares with global case studies in developed economies, such as Germany and Sweden, which have successfully decoupled economic growth from CO₂ emissions through proactive policies. These countries have implemented measures such as investing in renewable energy, enforcing stringent emission regulations, and promoting economic diversification to reduce dependence on carbon-intensive industries. The experience of these nations highlights the importance of well-designed policies in shaping environmental and financial outcomes.

CONCLUSION

The findings of this study have several policy implications. First, economic policies should integrate environmental considerations to ensure that growth does not come at the expense of sustainability. The Mexican government should consider implementing stricter emissions regulations, providing incentives for clean energy investments, and encouraging industries to adopt greener technologies. Second, regional cooperation is essential in addressing emissions, as the study demonstrates that emissions spillover effects transcend state borders.

Effective mitigation strategies should be designed at a regional level rather than focusing solely on state-specific policies. This is particularly important given that industrialized states with high emissions influence the environmental conditions of their neighboring regions. Third, further research should explore long-term policy impacts and sector-specific emissions reductions. Future studies could refine spatial models by incorporating more granular data on energy consumption, industrial production, and environmental regulations across different states.

By incorporating spatial econometrics into the analysis of CO₂ emissions and economic activity, this research provides a more nuanced understanding of Mexico’s environmental challenges. The study demonstrates that emissions are not merely an issue of economic expansion but also regional disparities and spatial interdependencies. As Mexico continues to navigate the complexities of balancing economic growth with environmental sustainability, the insights from this research can inform policies aimed at reducing emissions while fostering sustainable development. Balancing economic expansion and ecological responsibility requires comprehensive, evidence-based strategies that account for financial and spatial dynamics.

In conclusion, the relationship between economic activity, population and CO₂ emissions in Mexico reflects a critical challenge in the transition towards a sustainable development model. This study shows that mitigation policies must be comprehensive and regionally adapted, taking advantage of the analytical tools of spatial econometrics to maximize their effectiveness. By integrating spatial considerations into the design of environmental strategies, we can move towards a more equitable and resilient future, where economic growth is not in conflict with environmental sustainability.