Arizona backs out of cap-and-trade implementation

The state of Arizona has backed out of a voluntary carbon cap-and-trade scheme that it helped found, citing financial concerns.

Republican Governor Janice Brewer released an executive order stating that Arizona's economy would be hindered by continued participation in the Western Climate Initiative (WCI), a multi-state scheme that plans to develop a regional emissions cap-and-trade scheme similar to the Regional Greenhouse Gas Initiative (RGGI) in operation on America's East Coast.

Brewer said the State would continue its membership in the scheme, which it co-founded, but would not implement the cap-and-trade scheme outlined by the WCI, which is scheduled to come into effect in January 2012.

She made it clear that economic concerns were behind the decision, stating in the Executive Order that "imposing costs on Arizona's economy associated with a GHG cap-and-trade system that are not borne by national and international rivals would cost investment and jobs in Arizona and put Arizona at a competitive disadvantage without effectively addressing what is a national and global issue. "

Although the State will continue to support the Climate Registry developed by the WCI and intended to establish formal reporting standards for emissions among participating states and provinces, firms would only be asked to report emissions on a voluntary basis.

The Governor also established a Climate Change Oversight Group, which would monitor the WCI's work, and advise her on its progress.

The Western Climate Initiative, formed in 2007 to implement a carbon cap-and-trade scheme, currently consists of 11 participating states and provinces, and 13 states and provinces that have taken up "observer " status in the scheme.

The move is a further blow to the Obama administration's efforts to pass legislation enabling a national cap-and-trade scheme, which have stalled in the Senate and are facing fierce opposition from Republicans.