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It is an established fact that as a result of the green house gases (GHG) we are putting into the atmosphere we are warming the planet, and that unless we take steps now to reduce these emissions, the global consequences will be severe.
To avoid the worst consequences of global warming we need to reduce our emissions nationally by about 80 percent by 2050.
The effects of global warming are of particular concern to New Mexicans. Lack of water has always been a problem, and if global warming is not checked we can expect less precipitation and longer periods of drought in the years to come.
Even if precipitation levels went unchanged by global warming, the snowpack here and in Colorado that seasonally stores and renews our surface water, and is the source of our winter recreation, is certain to diminish.
Fortunately, New Mexico has already taken a number of important steps to curb global warming and its state-wide impacts. In 2005 Governor Richardson signed Executive Order 05-033, which required development of a New Mexico GHG emissions inventory by which progress in GHG reduction could be charted, established the New Mexico Climate Change Advisory Group (CCAG), and mandated studies on the potential effects of climate change on New Mexico.
The reports from these studies are available on the New Mexico Environment Department website. Among them, the comprehensive report “Potential Effects of Climate Change on New Mexico” lays out in detail both the interconnectedness of New Mexico’s environment and economy and the stress or irreparable damage they could suffer collectively by century’s end should GHG emissions continue unabated.
While the antidote to this dire prognosis seems obvious – burn less fossil fuel and use more renewable energy – writing this simple dictum into effective, publically palatable, and economically sensible policy is another matter. On this front, the CCAG in their report “Climate Change Action Plan” gave 69 policy recommendations which, if implemented, would lower GHG emissions in New Mexico by 35 percent by 2020 while creating net economic savings of more than $2 billion over that period. An implementation update in August 2007 indicated that 42 of these recommendations were being implemented, a number by executive action, and several through legislation passed in 2007.
In February 2007, New Mexico joined with Arizona, California, Oregon and Washington in establishing the Western Climate Initiative (WCI), an agreement among western states to reduce GHG emissions for mutual benefit.
The WCI is committed to set a regional goal for GHG reduction, develop a market-based regional cap and trade program to achieve the regional goal, and establish a registry to which main GHG emitters within the region will report their emissions ledgers for review and participation in the cap and trade program. A cap and trade program sets a limit or cap on the amount of GHG that can be emitted. Companies or other groups are issued emission permits and are required to hold an equivalent number of allowances (or credits) which represent the right to emit a specific amount.
The total amount of allowances and credits cannot exceed the cap, limiting total emissions to that level. Companies that over-pollute must offset their excess emissions by purchasing credits from those who pollute less. Companies that pollute less now own tradable commodities.
In effect, the buyer is paying a charge for polluting while the seller is being rewarded for having reduced emissions by more than was needed. Therefore, those that can reduce emissions the most cheaply will do so, thus achieving the needed pollution reduction at the lowest possible cost to society.
In September, 2008, the WCI released their recommendations for a regional cap and trade program. Governor Richardson has established a task force to turn these suggestions into recommended legislation which will be considered in the upcoming session.
We are very fortunate to have had a governor and legislature with the foresight to take action on these issues. But much remains to be done. Lower prices for gas and oil mean lower royalties to the State next year, and the resultant need to keep expenditures in check.
Nonetheless, continuing expenditures in this area, many of which more than pay for themselves over time, are essential if we are to build on the progress we have made.
State encouragement of renewable energy, which a cap and trade program will enhance, will mesh well with the incoming Obama administration goal of decreasing reliance on oil and coal, and should be a source of good jobs in New Mexico for many years.
We can be proud of the actions our State has already taken, and should encourage the administration and legislators to continue the good work they have started.