New Report: Pathways to Net-Zero for New Mexico’s Economy

In a set of briefs released today, modeling gives a new, in-depth look into pathways for New Mexico to cut climate-warming pollution while improving health and quality of life for its communities, particularly rural and tribal communities historically overburdened by fossil fuel development.Achieving the state’s near and long-term climate goals will depend on New Mexico’s leaders undertaking ambitious and timely action in the upcoming legislative session: the state and its utilities must accelerate the transition to renewable-powered electricity, electrify vehicles and buildings, and incentivize energy efficiency-driven savings. These briefs were released by GridLab, NRDC, and Sierra Club with modelling conducted by Evolved Energy and additional support from PSE Healthy Energy.

• Read the Electricity Sector Brief
• Read the Transportation Sector Brief
• Read the Buildings Sector Brief
• Read the Report Overview

These briefs explore pathways for New Mexico’s major economic sectors to achieve the goals set by the state’s Clean Future Act of 2022: 50 percent emissions reductions by 2030 (compared to 2005 levels) and net-zero greenhouse gas emissions by 2050 (with offsets limited to 10 percent of 2005 levels). Across all sectors, stronger policies and investments are needed beyond business as usual to achieve these targets. These decarbonization strategies must be centered around equity to ensure that their benefits accrue across all New Mexico’s communities, acknowledging that the state’s rural and tribal communities and communities of color are among those most overburdened by oil and gas pollution. 

Electricity: Decarbonizing the power sector is key to unlocking the lowest-cost decarbonization pathways across all other sectors

The report finds that the most cost-effective decarbonization strategies rely on New Mexico accelerating its solar and wind power buildout, expanding energy efficiency programs, and ending imports and use of coal power. The modelling shows that the most cost effective path to meeting New Mexico’s climate goals involves generating 97 percent of the state’s electricity from renewable resources and nuclear energy by 2030 - far outpacing the 50 percent renewable portfolio standard set by the Energy Transition Act of 2019. By cleaning up the state’s electricity grid, New Mexico can unlock emissions reductions in other sectors as more cars, trucks, and buildings are powered by electricity rather than fuels. These efforts must also be accompanied by expanding universal access to electricity for the scores of New Mexican households in tribal and rural areas who remain without modern electricity service.

Transportation: New Mexico must expand its market for zero emissions vehicles and non-vehicle transportation alternatives

The report finds that eliminating emissions from New Mexico’s transportation sector requires ramping up sales of zero emissions vehicles (ZEV) to over 50 percent of passenger vehicles and over 20 percent of trucks by 2030. To do so, the state should join other states in adopting strong ZEV and low emissions vehicle (LEV) standards, as well as California’s Advanced Clean Truck and Heavy Duty Omnibus rules. Making electric vehicles (EV) available to all New Mexicans will also rely on increasing the availability of public charging and purchasing support for low-income households and renters. At the same time, the state must alleviate the pressure of vehicle electrification on the electricity grid by investing in clean transportation alternatives: pedestrian and bike infrastructure, zero emissions public transit, and rail for freight shipping.

Buildings: Residential and commercial building improvements are a win-win for New Mexico residents and the climate

Emissions from commercial and residential buildings must decline by 20 and 30 percent, respectively, by 2030 to stay on track with New Mexico’s climate goals. First, the state can cut costs while improving quality of life for its residents by investing in energy efficiency and weatherization – empowering homeowners and renters alike to upgrade to more efficient appliances, better insulation, and more resilient building materials. Second, the state can create opportunities and incentives to replace fossil fuels in buildings with electric power for uses like space and water heating and cooking – for example, electric heat pumps (rather than gas-fired) must reach 70 percent of sales by 2030.

Facing dry crop fields, worsening wildfires, and depleted riverbeds, New Mexicans are increasingly concerned about the impacts of climate change. Passing bold climate legislation should be among New Mexico’s leaders top priorities as https://www.nrdc.org/experts/noah-long/new-mexico-climate-call. The report recommends the following policy considerations in order to meet the state’s climate targets.

Electricity Sector Recommendations

• Accelerate the state’s clean energy target to require carbon reductions of 90 percent by 2030 and 100 percent by 2035. Under every scenario modeled, the power sector must achieve over 90 percent emissions reductions by 2030 in order to reach the economy-wide net-zero goal by 2050.
• Accelerate all coal unit retirements no later than 2025, end imports of coal-fired power, and remediate legacy coal infrastructure sites across the state. As enabled by the ETA, securitization can fund just transition assistance programs for workers impacted by coal retirements.
• Expand state and utility energy efficiency programs and incentives. The state should direct utilities and co-ops to expand energy efficiency programs, tie utility performance metrics to the success of these programs, and provide financial assistance mechanisms that eliminate barriers for low-income customers and renters.
• Design utility programs to ensure universal access to affordable electricity, including shutoff protections and graduated electricity rates. The state must work with utilities to ensure universal access to affordable electricity for the many families across New Mexico’s rural and tribal communities who lack reliable electricity service.

Transportation Sector Recommendations

• Adopt a zero- and low-emission vehicle (LEV/ZEV) standard with strong 2026-2035 targets. Adopt the Advanced Clean Truck Act and Heavy-Duty Omnibus rules. Complement standards with EV charging infrastructure investments. New Mexico should join other states in requiring 100 percent zero-emission vehicle (ZEV) sales by 2035. Charging infrastructure incentives should be pursued in parallel; these can be supported through federal funds, including the $38 million authorized in the Infrastructure Investment and Jobs Act of 2021 (IIJA) for EV infrastructure.
• Design public charging infrastructure and EV purchase support programs for low-income households.
• Invest federal and state funds in strategies to reduce vehicle miles traveled (VMT), including expanding electrified transit, low-no fare public transit, freight shipping by rail, and pedestrian and biking infrastructure. New Mexico is slated to receive over $2.5 billion from transportation from IIJA, in addition to the state’s record budget surplus for 2021. Those funds should prioritize improving transit, bike and pedestrian infrastructure before building any new roads. State planning capacity should support municipalities in land-use and zoning decisions that increase density and reduce vehicle reliance in favor of transit-friendly communities.
• If adopted, the low carbon fuel standard should ensure all utility revenue is required to benefit customers and vehicle electrification.

Buildings Sector Recommendations

• Invest in a Climate Earthshot to support building improvements, including through rebates, direct payments, Community Energy Efficiency Development (CEED) Block Grants, and an expanded sustainable building tax credit. The state can invest its record budget surplus in helping New Mexicans upgrade to cleaner, safer, and healthier buildings.
• Regularly update building and stretch codes to match the International Energy Conservation Code (IECC) model codes on a three year schedule, driving towards a zero-carbon building stock.
• Develop commercial building performance and benchmarking standards. Requiring large commercial buildings to disclose their annual energy use through benchmarking standards can help the state understand the sector’s largest sources of emissions and identify the most cost-effective opportunities for improvements. A performance standard for existing buildings should be grounded in the state’s emissions budget.
• Advance utility investments in building electrification, weatherization, and flexible load programs.
• Co-invest in affordable and transit-friendly zero-carbon housing. Residential building decarbonization policies must be coupled with efforts to improve housing equity and mobility access such that their benefits accrue for renters, mobile home residents, and residents of multifamily units.
• Launch a planning process at the New Mexico Public Regulation Commission (PRC) that implements an equitable and responsible reduction of the gas distribution system over time. The PRC should launch a gas planning process that scrutinizes further investments in the gas system relative to alternative solutions.

New Mexico lawmakers convened for the legislative session on January 18th, 2022.