Cities on the edge. Turning the urban crisis into the great green opportunity for Mexico and the U.S.

In 2025, urban sustainability has ceased to be a matter of “good intentions” and has become a competitiveness strategy. In the United States, the deployment of federal funds —such as the Climate Pollution Reduction Grants and the Greenhouse Gas Reduction Fund— is financing high-impact municipal plans and projects. By November 2024, more than $4.3 billion had been allocated to 25 state and local governments, along with an additional $27 billion earmarked for distributed climate financing in vulnerable neighborhoods. These resources, designed for implementation between 2024 and 2026, are enabling cities to accelerate efficient buildings, clean mobility, and green infrastructure with a community focus.

Mexico, in turn, launched the National Water Plan 2024-2030, which recognizes water as a human right and prioritizes sanitation, reuse, and investment in infrastructure. The government projected around 20 billion pesos in funding by 2025 to spark strategic projects. The urban challenge is steep: Mexico City suffers from recurring floods and intermittent water supply, and in 2024, only 58.4% of its population reported consistent water delivery, while just 20% expressed confidence in its potability. Without integrated policies for rainwater harvesting, river restoration, and safe reuse, the water gap will continue to widen.

Data from 2024 shows that technology and economics have already shifted. In the U.S., 1.6 million electric vehicleswere sold, capturing over 10% of the market. Meanwhile, heat pumps outpaced gas furnaces by their largest margin ever, with 32% more units shipped than gas systems. For cities, this means lower local emissions, more predictable energy bills, and more flexible demand if paired with peak management and smart tariffs.

In mass transit, Latin America closed 2024 with 6,055 electric buses, a 13% increase from 2023. Mexico City began 2025 by adding 26 articulated electric buses to the Metrobús network on Lines 2, 5, and 6. These are clear signals that urban e-mobility is a viable public policy when combined with supply contracts, blended finance, and bulk procurement.

Still, the energy base matters: in 2024, 75% of Mexico’s electricity was generated from fossil fuels, while only 25%came from low-carbon sources; wind and solar together accounted for 13%. This limits the climate benefits of electrifying buildings and transport unless grid decarbonization accelerates alongside expansion of wind, solar, and storage. In the U.S., emission cuts in the vehicle fleet will receive new momentum with the federal Multi-Pollutant Standards 2027-2032, which tighten limits for cars and light trucks. Coordinated implementation with cities creates an opportunity to guide charging infrastructure and municipal fleet modernization.

What policy design is needed in 2025 for sustainable and binational urban ecosystems?

1. First, purpose-driven budgets: cities must align local funding with federal windows. On the border, cases such as Presidio, Texas, which secured $12.7 million for resilience and pollution reduction through green infrastructure and heat mitigation, illustrate how community-based projects can leverage federal dollars while generating local jobs. In Mexico, water-stressed municipalities can “pair” Water Plan resources with public-private partnerships for treatment plants, non-potable water networks, and urban infiltration corridors.

2. Second, regulation that enables markets: building codes that accelerate adoption of heat pumps, cool roofs, and thermal retrofits; standards for reclaimed water use in irrigation, urban cleaning, and light industry; and public procurement rules that require zero-emission buses and low-carbon materials. Academia —from UNAM to Tec de Monterrey— is already generating evidence and solutions on reuse, mobility, and urban modeling that must be translated into bylaws and tenders.

3. Third, technology with social license: air and water quality sensors open to the public, progressive tariffs that protect vulnerable households, and neighborhood participation in project prioritization. Planning must measure results in terms of tons of CO₂e avoided, liters of water reused, heat islands reduced, and minutes saved in travel time.

The advances of 2024 prove momentum exists, but 2025 requires addressing five bottlenecks. Metropolitan governance: without empowered coordinating authorities, green-blue infrastructure is fragmented. The electric grid: in Mexico, delayed interconnections and fossil fuel dominance reduce the competitiveness of electrification; faster transmission and storage are essential. Permitting and procurement: long processes block cities from capturing subsidy windows in the U.S. and increase municipal capital costs. Public acceptance of water reuse: water literacy and clear standards are needed to build citizen trust. Housing and climate justice: urban improvements must not displace those who pollute the least; without land-use tools and social tariffs, “green” can turn gentrifying. In short, 2025 must be the year of moving from pilots to portfolios: integrating water, energy, mobility, and housing into a single financial and regulatory equation that makes sustainability the new benchmark of urban competitiveness in Mexico and the United States.

Written by: Editorial

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