The livelihoods of people living in the Yucatan Peninsula in Mexico are mainly reliant on coast-dependant sectors such as tourism and the development of oil and gas reservoirs. The impacts of climate change, including sea-level rise, threaten to reverse socioeconomic gains from these sectors. This ‘Inside story on climate compatible development’ by the Climate and Development Knowledge Network (CDKN) presents the Yucatan Peninsula Accord, which was signed by the Mexican states of Campeche, Quintana Roo and Yucatan to address these concerns. It involves three main lines of action: a regional adaptation strategy, a REDD+ programme, and a climate fund. The brief argues that Mexico’s experience demonstrates that joint action at the sub-national level can serve as a catalyst for climate compatible development by generating international support, addressing common threats and opportunities, and ensuring complementarity between sub-national and national climate responses.