Environmental advocates and groups say they are disappointed with the governor’s decision to veto tax credits that could help reduce the use of fossil fuels.
There were few wins for the environment during the legislative session and the tax credits were one bright spot that brought optimism to groups like the Rio Grande Chapter of the Sierra Club until Gov. Michelle Lujan Grisham removed them from the final tax package.
“We’re just baffled,” Camilla Feibelman, the Sierra Club chapter’s executive director, said.
Demis Foster, executive director of Conservation Voters of New Mexico, said that her organization received a courtesy call from one of the governor’s staffers to inform them that Lujan Grisham planned to veto the five tax credits. She said that the staffer told her that the governor is still committed to approving the incentives, but that it would not happen this year.
“I was puzzled for sure and also disappointed,” she said about the vetoes.
Foster said she doesn’t understand why Lujan Grisham chose to veto the tax credits as they are an easy way to address climate change. She said other Democratic governors across the country have approved similar tax credits as a way to leverage federal money available through the Inflation Reduction Act.
“I don’t understand why we wouldn’t want to do that,” she said.
Foster said there isn’t time to wait on taking action to address climate change.
Mariel Nanasi, executive director of New Energy Economy, said she was never too enthusiastic about the tax credits, which she believed were paltry and wouldn’t bring real action to address climate change. At the same time, she called the vetoes pathetic as the state reached the anniversary of the largest wildfire in New Mexico history.
Nanasi said that the governor has done little in her six years in office to address the climate crisis and that the items she vetoed were essentially crumbs.
“The big elephant in the room is that her administration has demonstrated no leadership, no leadership in addressing the climate crisis,” she said.
In addition to vetoing five tax credits related to the environment or climate change, the governor vetoed a bill that would have created a geothermal energy research center and proponents said it would help jumpstart the geothermal industry in New Mexico.
Tom Solomon, the cofounder of 350 New Mexico, was one of the people who helped draft that legislation and served as an expert witness during committee hearings.
In a statement, he pointed out that the bill passed the House and Senate with almost unanimous support before Lujan Grisham vetoed it.
Nanasi said the best thing that the governor has done in terms of addressing climate was supporting community solar. The Community Solar Act passed in 2021, but, Nanasi said, it has been obstructed by utilities.
Feibelman said that Lujan Grisham has a strong foundation for defining her legacy as a climate leader. She signed the executive order that led to methane rules and pushed through the Energy Transition Act.
But, since Lujan Grisham took office, New Mexico has become the second largest producer of oil and gas in the country.
Feibelman said the emissions related to that surge in production have led to problems beyond the scope of what can be achieved through actions the governor has taken so far.
Addressing the climate crisis in New Mexico “will require bold action in every industry,” she said.
Feibelman said the governor needs to push for modern building codes and implement clean vehicle standards.
Lujan Grisham made early strides in addressing climate change
In 2019, shortly after Lujan Grisham took office, many environmental groups felt positive and excited about her leadership.
Foster said Lujan Grisham’s actions in 2019 made the state a leader in climate action. That included the passage of the Energy Transition Act and issuing an executive order to address climate. That executive order led to new methane waste rules and ozone precursor reduction rules.
“We haven’t had substantial action on climate since then,” Foster said.
But, while climate action has lagged in New Mexico, Foster said other states like Minnesota are taking advantage of the Inflation Reduction Act and passing laws that will help them make those federal funds go farther.
“This governor had a chance to extend the climate leadership she showed in 2019 by passing the ETA,” Solomon said in his statement. “She did the opposite. So while the oil industry cheered, we are left trying to explain that choice to our children, who will face an increasingly hot, dry and hostile world.“
Economy-wide emission reduction goals remain uncodified
Additionally, Foster said New Mexico needs to codify the governor’s executive order on climate change.
Foster said there’s still a lot of work to do to reduce emissions and she remains hopeful that New Mexico will accomplish that work. She emphasized that it is not just the governor’s actions that have led to New Mexico falling behind on climate action. The legislature also failed to pass many climate bills this year.
One environment bill that did pass was Senate Bill 9, which created a funding source for conservation programs in New Mexico.
Foster said this bill was successful because it had bipartisan support and because groups began working on it early. She said meetings began in May of last year to draft the legislation and those efforts included bringing people together who don’t usually agree.
“That’s how you get big pieces of legislation done and that’s how they got the ETA done,” she said.
That did not happen with a big emission bill.
The governor has been saying for years that she would push to codify emission goals across all economic sectors including transportation and building infrastructure. Foster said Lujan Grisham closed her State of the State address this year by calling for action on climate.
But, Foster said, as the session progressed, it took a long time to even write the framework for a bill to tackle emissions across economic sectors.
Late in the session when everything began to get backed up, environmental groups were told about a bill that would have called for zero emissions, but that proposed bill wasn’t flushed out, Foster said. She said it had no enforcement mechanisms.
“The allies that we work closely with were hugely disappointed with that type of framework,” Foster said.
She said that there were concerns that the bill would not have “the teeth it needed to be effective.”
In the end, Foster said the bill wasn’t introduced. Instead, environmental groups approached Sen. Mimi Stewart, D-Albuquerque, who introduced the Clean Future Act.
The Clean Future Act would have codified the governor’s emission targets, including reducing emissions to 50 percent of the 2005 levels by 2030.
The bill went to the Senate Conservation Committee first and a key committee member was not present when it was heard because they were presenting in another committee. Foster said that led to the Clean Future Act stalling in its first committee.
There wasn’t enough time to build support and move the bill through, Foster said.
While the governor has said she wants legislation to codify the emission reductions targets in her executive order, Feibelman said “you have to do more than put greenhouse gas emissions into law.”
If there isn’t a way to enforce those reduction targets, she said the legislation becomes symbolic.
Governor continues to support hydrogen despite environment concerns
Environmental groups like the Sierra Club have also broken with the governor’s support for hydrogen derived from fossil fuels, including methane-based hydrogen. Feibelman said with the best methane rules in the country, the gas industry would continue to have problems with leaking, venting and flaring. On top of that, the carbon captured after it is separated from the methane molecules would need to be sequestered in a deep, underground reservoir and there are questions about whether that is feasible in New Mexico.
“Investing in fossil fuel hydrogen is simply not a climate solution,” Foster said.
Feibelman said using fossil fuels to produce hydrogen could potentially do more damage to the planet than combusting them.
Nanasi also criticized Lujan Grisham’s “fierce defense of hydrogen.”
She said that New Mexico has the potential to be the number one leader of renewable energy in the United States and even globally. This would bring a new multi-billion dollar revenue stream into the state, she said.
“We’re missing out on it because of (Lujan Grisham),” she said.
She said New Mexico could take actions to require solar on all public buildings and to lower utility bills and stabilize the electric grid.
“That’s what leadership looks like,” Nanasi said.
Cabinet secretaries defend governor
As environmental advocates have criticized the governor publicly in the wake of the legislative session, two of her appointees—New Mexico Environment Department Secretary James Kenney and Energy, Minerals and Natural Resources Department Secretary Sarah Cottrell Propst—defended the governor in an op-ed published in the Santa Fe New Mexican.
“We are proud of every victory we have won, and New Mexico has been recognized on the national and world stage again and again as a climate leader in the last several years,” Kenney and Cottrell Propst wrote.
They highlighted the governor’s past actions including establishing climate bureaus. The state, under Lujan Grisham’s leadership, has adopted oil and gas regulations that the U.S. Environmental Protection Agency and the Bureau of Land Management are using as national models.
In addition to the ETA, the governor also successfully backed the Grid Modernization Road Map, the Solar Marker Development Income Tax Credit and the Water Data Act.
“Put simply: You would be hard-pressed to find any administration, anywhere in the country, moving as quickly as this one on the issues of climate change and environmental protection,” the secretaries wrote.
They pointed to the climate bill that was never introduced during the legislative session, which Foster also discussed.
“Unfortunately, the environmental coalition at the table did not support this bill, so it was never introduced,” they wrote.
Kenney and Cottrell Propst said the setback will not keep New Mexico from moving forward but said that ‘we must do so by building consensus and setting policies that not only eliminate greenhouse gas emissions, but also diversify our economy, support New Mexico families, and build bridges–not walls–as we move toward a net-zero future.”
Maddy Hayden, a spokesperson for the governor’s office, said in an email that Lujan Grisham’s administration has “consistently placed us as a national leader in the climate space. That work includes oil and gas emissions rules that are now serving as a model for the U.S. EPA as they develop regulations at the federal level – that’s huge, and these regulations are eliminating hundreds of millions of pounds of greenhouse gasses every year. That also includes the landmark Energy Transition Act and the enactment of Clean Car Standards last year. We’ve enacted Solar Tax Credits, updated building energy codes for the first time in years, and more.”
Hayden said the governor will “continue to pursue meaningful, bold climate action measures in the next session and throughout her second term.”