Transformational climate legislation in New Mexico

HB6: The Clean Future Act 

Bill Sponsors: Rep. Nathan Small, Sen. Siah Correa Hemphill; On the Governor’s Call 

As New Mexicans experience prolonged drought, devastating forest fires, unprecedented heat waves, and pollution from industries right here at home, we must prioritize just climate solutions that protect our people and preserve our air, water, and climate. 

In addition to protecting our health and tackling the climate impacts we’re already seeing across the state, the clean-energy transition is a once-in-a-generation opportunity to diversify our economy, raise new revenue, and create good jobs in growing industries along the way. For our climate, our health, and our economy it’s time to open new doors to a clean future for every New Mexico community. 

The Clean Future Act sets ambitious requirements of a 50% reduction of climate pollution in New Mexico by 2030 and at least 90% by 2050. Because New Mexico’s carbon emissions have increased since the 2005 baseline, this would represent a 64% reduction of current levels of climate pollution by 2030. 

To achieve this, New Mexico will have to begin a thoughtful transformation to clean energy and away from fossil fuels. A recent Gridlab report shows that to reach the 2030 limit, New Mexico must achieve: 

• 95% pollution reduction in the power sector
• More than 90% reduction in upstream oil and gas methane emissions
•  At least 55% electric vehicles as a percentage of new passenger vehicle sales
• 20-30% emissions reductions from commercial and residential buildings
• 70% electric furnaces and water heaters as a percentage of new sales ● Full compliance with emissions reductions in all sectors

The bill doesn’t allow offsets to meet the 2030 target and limits emissions that can be offset by 2050 to 10% of 2005 levels – this is among the most stringent limits anywhere. Key elements of the Clean Future Act: 

• Requires the state to reduce emissions 50% below 2005 levels by 2030. While emissions have increased since 2005, this would represent a 64% reduction from current levels by 2030. The bill does not allow offsets to meet the 2030 target. 
• Requires the state to achieve net-zero emissions in 2050 and beyond. “Net zero” means that any remaining emissions are offset by reductions elsewhere that would not have been achieved otherwise. It is a problematic concept, because it could allow big polluters to continue harming communities while paying for reductions elsewhere. However, this bill doesn’t allow offsets or credits for the 2030 reductions, and requires 90% actual reductions in the 2050 requirements, meaning offsets cannot exceed 10% of 2005 levels in 2050. 
• Prioritizes consultation with overburdened communities to support climate policies that address disproportionate impacts and improve our understanding of how climate change affects those communities. 
• Requires annual reports from state agencies on total emissions, emissions reductions, impacts of climate change on disproportionately impacted communities, and whether additional policies to reduce emissions are necessary. 
• Requires EMNRD and NMED to submit reports on the state’s progress toward climate targets, including an inventory of statewide emissions, with a focus on environmental impacts and progress in disproportionately impacted communities. 
• Ensures regulations are initiated by a certain date by requiring that the state Environment Department petition the Environmental Improvement Board to create rules to reduce emissions from sources covered by the federal Air Quality Control Act. 

Areas we want to see improved: 

• Legislation must prioritize consultation and protection for overburdened communities, not just in reporting and around offsets but in the rulemaking for direct, early carbon reductions.
• How greenhouse-gas emissions are defined will be critical to facilitate effective regulation and achieve emission reductions consistent with a stable climate future. The definition in the current draft should be expanded and clarified and needs to ensure that regulators have all necessary authority to enforce targets.
• Legislation should require NMED to initiate rulemakings earlier than 2025 to support meeting 2030 targets.
• EMNRD should complete its initial climate-change report more quickly, in time to support further action in the 2023 legislative session.

FAQ 

• Does this bill create a market? No. This bill does not create a market or even give regulators the authority to do so. Instead, this bill creates greenhouse gas pollution limits and requires the Environmental Improvement Board to adopt regulations to meet those limits. 
• Why does the bill mention fees? The bill allows collection of fees from polluters to cover administrative costs of regulation. The bill states explicitly that fees may only be used to support administrative cost. 
• Is there cap and trade in the bill? No. The bill includes caps on emissions but does not include a trade component by authorizing or creating a market. 
• Is an offset inherently traded? Offsets can just be accounted for and applied, not necessarily traded. 
• How much of total emissions reductions can be achieved through offsets? Offsets cannot be used in place of direct emissions reductions to hit the 50% target by 2030. The extent of offset use on the path between 2030 and net zero by 2050 will be determined in subsequent regulations, but the maximum emissions they could displace in 2050 is 7.5 million to 7.8 million metric tons—representing 10% of 2005-level emissions, which are about 75.6 million metric tons. 
• Why might offsets be needed for the last 10% of emissions? Some emissions sources are difficult to decarbonize directly, such as aviation and cement manufacturing. While we hope to find ways to decarbonize these emissions sources directly, offsets may be necessary as we pursue those solutions. 
• Could offsets justify continued pollution in low-income communities and communities of color past 2050? [something here about what is in the legislation or should be in the legislation to prevent this from happening] Offsets should be about allowing time to figure out difficult-to-decarbonize sectors—and never about justifying emissions in communities that are already disproportionately burdened by pollution. In this legislation and subsequent regulations, climate advocates are committed to strengthening equity provisions and ensuring the greatest possible pollution reductions in low-income communities and communities of color, both in the near term and by 2050. 
• Do we know what 2005 emissions levels were? Inventory sets the 2005 baseline at 75.6 million metric tons. Emissions have increased by about 50% between 2005 and today.