October 2010Sustainability

Jumpstart New Mexico’s Economy Transition to Clean Energy

by Lilia Diaz

New Mexico has one of the greatest opportunities at its doorstep to become a clean energy economy. Currently there are two petitions in front of the NM Environmental Improvement Board (EIB); one from the advocacy group New Energy Economy (NEE) that recommends a mandatory cap on carbon emissions, and the other from the NM Environment Department that proposes a multi-jurisdictional cap-and-trade program for carbon emissions reductions. If either or both were to be adopted, NM would lead the nation in addressing climate change. While much of the country is struggling with high unemployment, NM could seize this opportunity to jumpstart its economy by attracting increased investment in renewable energy technology, and in research & development, which would create thousands of jobs.

The movement to transition NM to a clean energy economy took a substantial step forward in 2009 when NEE petitioned the EIB to set a science-based cap on global warming emissions in the state. NEE’s petition would require fossil fuel industries to reduce greenhouse gas (GHG) emissions under the Air Quality Control Act, which is based on a theory that these emissions constitute “air pollution” and threaten the health of people and natural resources. The cap proposes a reduction of 3% per year beginning in 2012 and would only apply to industries that produce more than 25,000 tons of carbon emissions.

William Wiley, a stockbroker from Albuquerque and the President of NM chapter of Republicans for Environmental Protection, testified, “we can show the rest of nation that we are forward looking and welcome green industries. …This is not a draconian measure. All of the U.S. will come to this point at some time. We can lead and not follow.”

An alliance of 17 co-petitioners representing health groups, renewable energy businesses, Native American leaders, social justice advocates, and environmental organizations from around the state are backing the petition. It is opposed by big utilities, oil and gas companies such as the Public Service Company of New Mexico (PNM), El Paso Electric Company, and the Independent Petroleum Producers Association of New Mexico.

Hearings for New Energy Economy’s petition took place most recently in August, and will resume on October 4th. Expert witnesses gave technical testimony as to why the proposal is not only economically feasible but also crucial to the health of our state. Climate scientist Dr. David Gutzler said that current global warming is caused in large part by greenhouse gas emissions from the burning of fossil fuels, and that some of the most profound impacts will be on our watershed systems. Steve Michel, an attorney with Western Resource Advocates, testified that the cost of this entire regulation, assuming that the maximum expenditure is met, would be an increase of less than 1 percent per year.

Rick Sprott, the Director of Air Quality under Governor Huntsman (R-Utah) testified that the regulation was practical and effective, and its only flaw was that it wasn’t being implemented on a federal level. Renowned Native American activist, writer and economist Winona LaDuke said, “You can either be in the back seat of the bus letting everybody drive the choices, or you can make the choices ahead of time and ensure that you have a strong economy.”

While big industry opponents repeated their tired mantra that NEE’s regulation would cost jobs, many small business owners from around the state spoke to a different vision – one of hope and possibility. By implementing a cap on emissions, they said, NM would send a strong signal to investors who seek an economically stable environment and are reluctant to continue to pour money into high-risk dirty industries. They are looking to this state to utilize its sun and wind potential, and jumpstart a lagging economy. Renee Frank, a realtor from Las Cruces, testified that, “Establishing caps on greenhouse gasses will provide an immediate and sustained stimulus to the construction and renewable energy industries in our community. It will generate new business opportunities for local residents. It will encourage more research and development, and thus stimulate additional business opportunities.”

Right now is the time to act. Billions of dollars in federal funding via loan guarantees, grants and tax incentives are being given to states and private companies to develop renewable energy projects. Rusty Schmit, CEO of Albuquerque’s Clean Switch, testified about how RE technologies developed by Advent Solar, a local company, were sold and shipped to China because no one here was purchasing them. “Though that technology was developed with U.S. taxpayer money at Sandia National Labs, and commercialized with private investment money at Advent Solar, that technology is now being reestablished and deployed in China. This is a direct loss to our state of hundreds of jobs. To reiterate: this is happening because the leaders and citizens in those countries have recognized the need to mitigate carbon emissions and diversify the energy base, and they have taken action to do just that.”

There has been an emergence of private investors ready to invest in green industries. A recent statement from Ceres, a national network of investors reportedly worth $13 trillion, is entitled: “2010 Investor Statement on Catalyzing Investment in Low-Carbon Economy.” The statement makes it clear that investors and businesses realize that climate change is real; that it will have an impact on the economy, and that “policymakers around the world must take rapid action”[1] The very first measures they deemed “critical” were: “Short- and long-term emission reduction targets” and “policies that put an effective price on carbon such that businesses and investors reassess investment value and redirect their investments.[2]” Basically, these high-profile investors are encouraging companies to accelerate the transition to a low carbon economy and are urging strong public policies on climate change and energy efficiency. Why? To limit their investment risks and spur investment through prompt and effective regulatory measures.

While it is worth focusing on the potential of these possible reforms, it is absolutely unthinkable to deny the costs of inaction. New Mexico will potentially be one of the states hardest hit by climate change, impacting our already vulnerable water resources. As a result of higher temperatures and drier lands, there will be an increase in wildfires. Besides the health and environmental impacts, there will also be huge economic consequences. If no action is taken, researchers in the Program on Climate Economics of the Climate Leadership Initiative (CLI) estimate the minimum annual cost to each New Mexican household will be $3,430 by 2020 and $5,410 by 2040. With no changes in policies these costs could rise as high as $12,000 per household per year in 2080.[3]

In recognizing the links between health, food, fuel scarcity, poverty, energy and jobs, we can help address the global challenges of climate change, peak oil, and the economic and health challenges afflicting our communities. “The best answer to our ecological crisis also responds to our socioeconomic crisis… That same path can lead us to a new green economy – one with the power to lift people out of poverty while respecting and repairing the environment.”[4] By investing in energy efficiency, more effectively constructed buildings, renewable energy, and local food systems, we can help secure a place in the developing green economy and ensure a sustainable future.

The long-term health of any economy is contingent on the environment. And although companies may say that the proposed regulation will have extremely negative economic impacts, a broader vision reveals that the long-term impacts of corporate-sponsored degradation to the land will have much greater effects. In essence, the costs of fossil fuel energy production do not take into account the true costs of economic wealth and health of our society. A durable economy is based on the green economy.

Lilia Diaz, Outreach Director of New Energy Economy, is dedicated to addressing environmental justice issues in New Mexico. She got her B.A. from the New School University in New York City. She resides in Santa Fe. Questions about the hearings? E-mail:  newenergyeconomy@gmail.com

[1] www.ceres.org/Document.Doc?id=520

[2] www.ceres.org/Document.Doc?id=520

[3] An Overview of Potential Economic Costs to New Mexico of a Business-As-Usual Approach to Climate Change,” February 2009, www.ecy.wa.gov/climatechange/…/021609_ClimateEconomicsImpactsReport.pdf

[4] Jones, Van. The Green Collar Economy, New York: Harper Collins, 2008.

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