Renewable Portfolio Standards and Economic Performance in New Mexico
Keywords:
Policy stringency; Bounds testing; Business cycles; Predictive causality; Electricity pricesAbstract
Objectives: This article examines whether changes in New Mexico’s renewable electricity requirement were associated with statewide real output from 1997 to 2024. Prior Work: Studies of renewable portfolio standards emphasize generation, prices, and differences across states; New Mexico research has also modeled prospective regional effects. Approach: We analyze 28 annual observations using a dynamic regression with national output and state controls, small-sample bounds tests, and a lag-augmented predictive test. Results: The preferred model gives a negative adjustment coefficient (−0.4187; p = 0.018), but the bounds statistic (F = 3.601) is inconclusive at 10 percent and does not establish a level relationship at 5 percent. Neither the predictive nor the noncausality null is rejected. Implications: Statewide output alone cannot determine whether a renewable mandate improves energy affordability, employment, or environmental performance. Value: The analysis separates a legal policy path from actual compliance and distinguishes conditional model coefficients from evidence of a durable economic relationship.
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