The cap requires yearly three percent reductions from 2010 levels, starting in 2013.
Approved by a 4-1 vote, the limit would apply to sources emitting more than 25,000 metric tons of CO2 a year – mainly power stations, refineries and natural gas facilities.
But the rule includes an annual limit on how much emitters will have to spend to comply.
Emitters would be able to bank emissions reductions credits for future use, and can get out of the requirement if they show that the rules are detrimental to their financial health.
The rule includes a provision to review the cap in 2014.
But it could be repealed sooner, the New Mexico Independent reports.
Republican Governor-elect Susana Martinez opposes cap-and-trade programs, and will almost certainly replace the EIB with her own appointees, the Independent said.
The cap was proposed in a petition by the environmental group New Energy Economy in 2008.
New Mexico’s largest utility, PNM Resources, joined oil and gas companies in suing to prevent the petition being heard, but the New Mexico Supreme Court allowed the case to go ahead.
The state limit on carbon would kick in if states and Canadian provinces in the region don’t manage to approve the Western Climate Initiative (WCI), which would order 2 percent cuts in CO2 starting in 2012.
The EIB last month approved New Mexico’s participation in the WCI.
But Martinez opposes the WCI and could challenge New Mexico’s involvement.