Mexico City plans to link the tenure tax on vehicle owners to the autos' pollution levels and channel more of the proceeds into public transport, Mexican broadcasters said on Thursday.

The city currently earns around 5 billion pesos (417 million U.S. dollars) a year from the tax, which it will be earmarked for the city's Metrobus (autobus) electric mass transit system and the metro light rail system, Mario Delgado Carrillo, the city's head of finances told a broadcast event.

The tax represents around 7 percent of the city's finances, and has been a subject of controversy for decades. It was introduced in the late 1960s to pay for the city's Olympic bid but has never been revoked.

"This a progressive tax, where the 25 percent of citizens that own a car, to transfer resources to the 75 percent who do not," Martha Delgado, the city's environment chief, told the same public meeting.

The city is restructuring the tax to take into account the value and pollution produced by vehicles, she added. "The oldest cars are those that pollute most, but if we look at only this criterion the tax will be very regressive."

Mexico City was the world's most polluted city in the early 1990s, but has reduced the toxic chemical in the air via policies that prevent the most polluting cars from driving, and restrict driving for average models. The city is also following through on commitments made to the central government to reduce greenhouse gas emissions.

Mexican President Felipe Calderon ordered all regions to cut emissions because his administration has been committed to cut emissions by 50 million tons a year by the end of his presidency.

Calderon's commitment has been recognized by the United Nations, which awarded Mexico the honor of hosting the 2010 edition of the Conference of the Parties on Climate Change this November.