Green Revolution Underway! Mexico and the United States Boost Tax Incentives for Sustainable Businesses

In recent years, Mexico and the United States have intensified efforts to promote a greener economy by implementing tax incentives and support programs for companies investing in eco-friendly solutions. This analysis compares the initiatives and results achieved in both countries between 2020 and 2024, highlighting the challenges they face in 2025.

Mexico: Progress and Strategies

In 2020, the Mexican government launched the National Development Financing Program 2020-2024 (Pronafide), outlining key strategies to ensure fiscal and financial resources aimed at improving public welfare, with a focus on efficient and sustainable resource use.

By 2024, private investment in sustainable projects had increased by 15% compared to 2020. This growth is partly attributed to tax incentives allowing deductions of up to 30% for investments in renewable energy and clean technologies.

At the state level, Jalisco has been a pioneer in sustainability promotion. Governor Pablo Lemus Navarro announced a 3.2 billion peso investment to clean up the Santiago River, emphasizing the importance of enhancing citizen participation in responsible water consumption and creating a new waste reduction law in collaboration with society.

United States: Policies and Outcomes

In the United States, the Inflation Reduction Act (IRA) of 2022 has been a cornerstone for investments in clean energy. Between 2022 and 2024, private investment in clean technologies and infrastructure reached $493 billion, a 71% increase compared to the previous two years.

Texas, under Governor Greg Abbott's leadership, has stood out for its business-friendly climate. In November 2024, Texas was named the state with the best business environment in the U.S. for the second consecutive year. Abbott emphasized that Texas offers unique advantages such as the absence of corporate or personal income taxes, a highly skilled workforce, and a reasonable regulatory environment that enables businesses to thrive.

2020 VS 2024 Comparison

Between 2020 and 2024, both countries made significant strides in promoting the green economy: 

• Private Investment in Sustainable Projects: Mexico reported a 15% increase, while the U.S. saw a 71% rise. 

• Tax Incentives: Mexico offers deductions of up to 30% for eco-friendly investments, while the U.S., through the IRA, has provided substantial tax credits for clean energy and sustainable technologies.

Challenges for 2025

Despite the progress, both countries face challenges in maximizing the potential of the green economy in 2025:

1. Infrastructure and Regulation: Enhancing infrastructure for renewable energy and streamlining regulatory processes to facilitate clean technology adoption is essential. 

2. Education and Awareness: Promoting greater environmental awareness and educating businesses and the public on the benefits of sustainable practices are crucial. 

3. Financing and Accessibility: Ensuring small and medium-sized enterprises (SMEs) have access to financing and resources to implement eco-friendly solutions.

Both Mexico and the United States have shown a growing commitment to promoting the green economy, implementing tax incentives and support programs that have led to significant increases in sustainable investments. However, to fully capitalize on these advances in 2025, it is imperative to address the mentioned challenges and strengthen collaboration among governments, businesses, and civil society.

Governor Pablo Lemus Navarro of Jalisco has emphasized the importance of public-private collaboration to drive sustainable economic development in the region. He has proposed creating regional tech parks, incubation programs, business generation initiatives, and establishing the State Energy Agency, among other measures. These initiatives aim to boost entrepreneurship and innovation in the state, highlighting the vital role of public-private cooperation.

Meanwhile, Texas Governor Greg Abbott has stressed that Texas remains the number one destination for businesses to thrive, succeed, and create high-paying jobs for Texans. He noted that Texas offers unparalleled advantages: a business-friendly climate, no corporate or personal income taxes, a highly skilled and diverse workforce, easy access to global markets, and a reasonable regulatory environment that enables businesses and entrepreneurs to prosper.

These perspectives reflect complementary approaches to promoting sustainable business, underscoring the importance of public policies that encourage investment in eco-friendly solutions and cross-sector collaboration to achieve sustainable economic development.

Written by: Editorial Team