State drops out of regional carbon trading scheme

Arizona has pulled out of the Western Climate Initiative (WCI) cap-and-trade scheme over fears it would put the state at a competitive disadvantage.

Arizona governor Janice Brewer issued an executive order on February 11, announcing the state would not implement the greenhouse gas (GHG) cap-and-trade proposal advanced by the WCI, which is set to begin on January 1, 2012.

The executive order released yesterday by Brewer said: “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.”

The state will continue to be a member of the WCI “to ensure that Arizona’s unique perspective will be advanced and considered by the WCI partner jurisdictions as they work to develop the initiative", according to the executive order.

Arizona businesses will continue to participate in The Climate Registry, a multi-state collaboration that sets GHG emission standards, as voluntary reporters. The state will also retain membership of the Arizona-Sonora Regional Climate Change Initiative, which aims to develop a regional inventory of GHG emissions and identify reduction and energy efficiency opportunities.

According to the executive order, Arizona’s state capita GHG emissions are roughly one-third less than the national average due in part to its use of nuclear power and its warmer climate.

Arizona was a founding member of the WCI in February 2007 and also implemented one of the first state-based graduated renewable energy requirements for electric utilities in 2006.

Six US states and four Canadian provinces will now launch the WCI cap-and-trade scheme in January 2012. The body released the design for the programme on September 23, 2008. Full implementation is expected for 2015.

The House of Representatives passed an energy bill that included a design for a federal carbon cap-and-trade scheme in June 2009. The passage of similar legislation introduced in the Senate in September has since stalled.