How Claudia Sheinbaum Could Change Mexico

“It’s cheaper and more efficient to implement these policies through state-owned companies,” Romero told me. “We believe that state-owned companies have a longer-term horizon that can sustain these kinds of investments. Sometimes private companies don’t, or the investment and return horizons are not within the range that investors are expecting, so they need to be incentivized and subsidized,” he added. These investments will still involve a sizable role for the private sector—particularly for financing—but higher-level coordination, Romero argues, can offer investors, certainly in terms of pricing and scheduling, things that private sector–led projects often can’t. In the U.S., for instance, several high-profile offshore wind projects have been canceled in recent months by developers citing supply chain constraints, insufficient subsidies, and related disinterest from investors seeking larger and steadier returns.

“Energy transitions are faster if implemented by the state,” Romero said, and better at meeting goals other than profit, like expanding access to cleaner and more affordable electricity. “It’s not that it’s not possible with the private sector only, but it’s faster, easier, and cheaper to mandate a public company do something rather than incentivize and subsidize private companies to do something they might not end up doing.” There’s evidence to back up that approach, even if it might seem a bit alien in the U.S. Researchers at MIT’s Center for Energy and Environmental Policy Research found that state-owned utilities in the European Union had a “significantly higher tendency” to invest in renewables than their private-sector counterparts.

Not all of Sheinbaum’s plans will be great news for climate advocates. Her plan for PEMEX involves boosting refinery capacity, investing heavily in petrochemicals, and increasing oil production to 1.8 million barrels per day before stabilizing it there. “We believe that Pemex needs to continue to produce oil and gas,” Romero told me, noting that Pemex won’t follow a similar path to Dong Energy, the Danish state-owned fossil fuel firm that has transformed into a major wind power developer, Ørsted.