On Tuesday, while voters rejected many politicians who supported cap-and-trade legislation, the New Mexico Environmental Improvement Board (EIB) adopted what it said are the most comprehensive greenhouse gas regulations in the U.S.

The decision was in response to a petition by the state Environment Department that was designed to enable New Mexico to actively participate in the Western Climate Initiative, a regional cap-and-trade organization. Implementation of the provisions will be contingent upon other states and provinces instituting similar emissions limits that would help create a market for tradable allowances.

The plan calls for 2% reductions in carbon dioxide (CO2) emissions beginning in 2012 and would involve about 63 “large industrial sources,” the EIB said. A unanimously approved amendment provides an option for the state to propose cost and compliance containment measures.

The Environment Department said that New Mexico’s annual carbon dioxide emissions are about 24 million tons. Last week, the California Air Resources Board said that by 2015, that state’s proposed cap-and-trade program would involve about 360 businesses and cover nearly 400 million metric tons of CO2 from power plants, factories, refineries, and vehicle tailpipes. Reductions under the California program would also start in 2012.

Advocates of the New Mexico plan say that a cap-and-trade program would attract clean energy jobs to the state while lowering emissions of CO2, and some economic analyses show a modest benefit to the state economy from the plan. Allowances would be allocated free to regulated sources.

Though the proposed greenhouse gas rules were applauded by Governor Bill Richardson (D), they could face opposition from governor-elect Susanna Martinez (R), a climate change skeptic.

The state’s largest electricity provider, PNM, said in a statement, “We remain convinced that comprehensive federal legislation is the only way to meaningfully reduce emissions, minimize costs to customers and to our economy, and not disadvantage any particular state. As a result, we are disappointed in this decision, which is scheduled to become effective in New Mexico on January 1, 2011.

"We have worked with a broad coalition of governments, businesses, nonprofits and individuals to oppose this proposal from the beginning. Because of the impact this new law could have on our state, our company and our customers, we will actively work with them again to evaluate all options, including legal, in response to today’s 4-3 decision."

Sources: Bloomberg Businessweek, Bloomberg, New Mexico Business Weekly, Public News Service, PNM, California Environmental Protection Agency, Air Resources Board, POWERnews