Towards a green transportation system in Mexico: The role of renewable energy and transport public-private partnership to curb emissions

Abstract

Given the substantial financial requirements, greening the capital-intensive based infrastructure like transport requires pondering upon new innovative strategies. As the public sector has demonstrated a lack of sufficient funds in numerous instances, promoting the Public-Private Partnership (PPP) has become a promising pathway toward green transportation. However, the role that PPP investments in the transportation sector in reducing transport CO2 emissions (TCO2e) on the road to meeting the sustainable development goals (SDGs) has received minimal attention. In this context, this study investigates the impact of PPP in the transportation sector and renewable energy on TCO2e for Mexico from 1990 to 2022, while controlling economic and urban settlement growth. For a novel attempt, this study leverages several modern econometric methodologies, such as the Augmented and Dynamic ARDL which allows estimating long-run and short-run elasticities vis-à-vis future scenario analysis. Results divulge that the PPP in transport curbs TCO2e over the short term, but the long-term effect is insignificant. Moreover, findings uncover that while the usage of renewable energy strengthens environmental circumstances, a rise in the urban population has a short-term negative impact on TCO2e. Moreover, the economic progress boosts Mexico's TCO2e and has a more devastating long-term effect, which is contradictory to the Environmental Kuznets Curve (EKC) hypothesis. The current study suggests that in order to advance the nation's green transportation system, authorities in Mexico should implement several measures to increase the pie of renewable energy and effective public-private partnership investment in the transportation sector.