Just a month after a New Mexico panel voted to start a cap-and-trade system in the state, the plan has been challenged. Farmington, New Mexico city counselors cast a unanimous vote this week to appeal the decision of New Mexico’s Environment Improvement Board.

That decision, which came in early November, called for the establishment of a system where greenhouse gasses are reduced though a trading system based on carbon emission levels. The system would set a limit on how much carbon dioxide they can release into the air. To go beyond that limit, companies and power plants would have to purchase credits. Entities that were under the limit could sell their credits or hold on to them hoping the worth of their unused credits increases. The emissions limit would decrease by an average of two percent each year. It’s cap-and-trade at it’s finest.

So fine, in fact, that it’s just make-believe.

The New Mexico system would only enter the physical world if the state had others to trade with. Trading by yourself can make you go blind.

After the system was put in place, Bloomberg quoted a New Mexico Environment Department official saying, “New Mexico won’t proceed with the cap-and-trade program unless states or provinces with combined emissions of at least 100 million tons of carbon dioxide agree to participate in the proposed carbon trading bloc.” That has not happened yet, and most who think that will happen soon are also likely to be residents of the Land of Make Believe.

So, Farmington challenged a ruling that is not in effect and may never be in effect. The city is an interesting first soldier in the fight against the ruling. Farmington’s economy is heavily based on the coal, petroleum, mining and natural gas industries. So that may explain why the city took action even though the state’s incoming governor or state legislature is likely to strike the cap and trade system down. And let’s not ignore the fact that there are certainly plenty of interests in the energy industry with deeper pockets than Farmington that are probably eager to challenge the state.

Still, Farmington is sticking to its principles, or at least that’s what the lawyers are saying. Tom Otter, who represents the city, told the Farmington Daily Times, "Since there's no federal or state standard and because the regulations themselves do not attempt to create a standard, the board simply does not have the authority to adopt these regulations.” The same article estimates the lawsuit will cost Farmington between $10,000 and $50,000 depending on if, and how many, others join them in the appeals process.

No matter what, the make-believe system is now even more make-believe. The appeals process could take up to two years in real-world time. 

Make-believe cap-and-trade plan heads to court
Real or not, Farmington, New Mexico wants no part of a system that reduces CO2 emissions.