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A recent op-ed by Kenneth Costello, a regulatory economist, has sparked debate over New Mexico’s aggressive clean energy policies. Published on Master Resource, the piece criticizes the state’s Energy Transition Act (ETA – also known as its Green New Deal), and related mandates, arguing they impose higher energy costs on consumers, especially low-income households, while providing minimal environmental benefits.

Costello’s critique begins with a sobering assertion: “New Mexico has one of the highest poverty rates in the country. Higher energy prices are, in effect, a regressive tax that places low-income households in the state in peril.” He argues that the ETA’s stringent renewable energy mandates, which require 50% renewable energy by 2030 and 100% by 2050, will significantly raise electricity rates. The burden of these increased costs, he notes, will fall hardest on the state’s most vulnerable populations.

The piece outlines three “hard truths” that Costello believes should shape New Mexico’s energy policy. The first is that New Mexico’s clean energy efforts will have “no climate benefit” due to the minimal impact a single state’s actions have on global climate change. Costello references data showing that even if the entire Paris Agreement were fully implemented, it would only reduce global temperatures by 0.17 degrees Celsius by 2100. He points out that unless large emitters like China and India fully participate, state-level initiatives are effectively symbolic and economically self-destructive.

The second “truth” is that clean energy mandates drive up prices. Costello argues that the ETA creates a “moral hazard” for utilities like the Public Service Company of New Mexico (PNM), which is allowed to recover costs associated with shutting down fossil fuel plants. This incentivizes PNM to comply with costly mandates while passing expenses on to ratepayers. “The losers from this bootleggers-and-Baptists coalition are energy consumers,” Costello writes, highlighting how utilities face reduced accountability under the ETA’s cost-recovery provisions.

The third truth concerns the “cost-benefit failure” of clean energy mandates. Costello contends that clean energy policies like tax credits for electric vehicles (EVs) and renewable energy mandates fail any rigorous cost-benefit analysis. By prioritizing special interests and “quasi-religious” climate activism over practical economics, New Mexico’s policies ignore the financial toll on residents and the broader state economy.

Costello’s op-ed critiques the “specious reasoning” behind clean energy advocacy, asserting that politicians and the media exaggerate climate threats to justify costly policies. He argues that scientific uncertainty is often downplayed in public discourse, while media coverage inflates the likelihood of worst-case climate scenarios. “One must then ask why New Mexico is so committed to promoting clean energy?” Costello asks, suggesting that rent-seeking special interests, not the public good, are driving policy decisions.

Highlighting examples from other regions, Costello warns that New Mexico risks following in the footsteps of California and Germany, where aggressive clean energy policies have led to skyrocketing energy costs and economic decline. He points to data showing that electricity rates in California’s major cities increased by as much as 63% from 2020 to 2023. Germany’s “Energiewende” program, he notes, has similarly driven up power costs while diminishing the nation’s industrial competitiveness.

The op-ed concludes with a cautionary note about the unintended consequences of government-led energy transitions. Costello emphasizes that effective energy policy must balance costs and benefits, account for economic trade-offs, and prioritize the well-being of consumers. Without these considerations, he warns, New Mexico risks further economic hardship, especially for low-income households, and will see “diminished economic efficiency, lower economic growth, and amplified economic inequality.”

Kenneth Costello’s analysis offers a stark warning for New Mexico’s policymakers as they push forward with their clean energy agenda. His call for greater scrutiny of energy mandates echoes broader national debates on the economic impact of green energy policies.