New Mexico Approves Cap on Carbon Emissions

Who says climate policy is dead in the U.S.? By a vote of four to one, the New Mexico Environmental Improvement Board (EIB) voted Monday to adopt a new state pollution limit requiring the state’s largest emitters to reduce their carbon dioxide emissions by 3 percent per year from 2010 levels starting in 2013.

Monday’s ruling is the culmination of a two -year petition process that took a backseat when the EIB approved participation in a regional cap-and-trade program on election night, the same night Republican Susana Martinez was elected as New Mexico’s next governor. Martinez campaigned against the proposed carbon pollution rules and even told Politico in August that she had her doubts about the human causes of global warming.

The new rule will apply to stationary sources that emit more than 25,000 metric tons of carbon dioxide—mostly electrical generating power plants, refineries, and natural gas processing and compression facilities—to reduce carbon emissions by 3 percent annually from 2010 levels.

The petition was first started and then championed through the process by New Energy Economy (NEE), a New Mexico-based nonprofit organization. NEE Senior Policy Advisor Mariel Nanasi said the rule is designed to make it as easy and inexpensive as possible to meet the carbon reduction goals, but she said what’s more important is what the rule means for New Mexico’s economy.

“This new policy makes New Mexico the nation’s leader in carbon pollution reduction while at the same time stimulating our economy and creating jobs for New Mexico families and communities,” Nanasi said. “The board understands that the same technologies that can reduce carbon pollution can also make New Mexico more competitive in the clean energy economy, which means more long-term, well-paying jobs for New Mexicans.”

New Mexico’s largest utility, PNM Resources, and the oil and gas industries sued to prevent the petition from being heard by the EIB, but the New Mexico Supreme Court in a unanimous decision overruled a lower court injunction, allowing the process to go forward.

Special provisions included to keep costs down

Recognizing opposition from PNM and other fossil fuel industry stakeholders, the EIB pushed the start date back one year to 2013 and made other concessions for the state’s largest emitters.

The rule includes provisions to keep emitters’ costs down including an annual limit on how much emitters will have to spend to comply; banking provisions which allow emitters to hold onto credits for future use; an “off ramp” if businesses can show that the rules will prove detrimental to their economic viability, and; a provision that will allow for reevaluation of the rule in 2014.

Despite posturing from electricity generators and the oil and gas industry, the architects of the rule say it will increase electricity prices by less than one percent and have an impact of a fraction of a percent for the oil and gas industry.

“[A]s a practical matter, the economic impacts are going to be trivial and pretty much unnoticeable,” said Steve Michel of Western Resource Advocates, principal architect of the rule.

The program is set to sunset in 2020, or sooner if a national or regional carbon pollution reduction program is implemented.

“Ours would not go into effect unless the regional program is not implemented,” said NEE executive director John Fogarty. “It’s really just a backup plan to keep New Mexico moving ahead.”

Article by Timothy B. Hurst, appearing courtesy ecopolitology.

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