As perhaps a harbinger of climate change and cap-and-trade efforts aimed at greenhouse gas (GHG) emissions, Arizona formally pulled out of the regional Western Climate Initiative (WCI), a once-promising multi-state effort involving seven states and four Canadian provinces. California and the provinces now appear to be leading the charge alone.

Arizona has joined a new initiative, North America 2050, aimed at spurring energy innovation and economic opportunities, according to Henry Darwin, head of the Arizona Department of Environmental Quality.

“Arizona believes there are more effective, responsible ways to realize the environmental and health benefits the WCI program seeks to achieve while avoiding the economic costs to industries that are subject to cap-and-trade,” Darwin said. In the continuing struggling national economy and high unemployment, increasing numbers of elected officials have questioned the estimated cost of a cap-and-trade system.

California and the four Canadian provinces announced Nov. 10 the formation of a WCI nonprofit unit to administer a cap-and-trade program. And late in October, the California Air Resources Board (CARB), which has the lead in implementing the state’s far-reaching 2006 climate change law (AB 32), set final rules for the state’s precedent-setting cap-and-trade effort that was called for in AB 32 (see Daily GPI, Oct. 25). The rules hold long-term implications for energy operators, particularly natural gas-fired electric generation plants.

Darwin noted that the America 2050 collaborative involves 13 states (including California) and the four Canadian provinces (British Columbia, Ontario, Quebec and Manitoba), and the effort is exploring carbon capture and sequestration and the use of sustainably harvested biomass fuels to displace traditional high-carbon fuels among other efforts. He said Arizona is looking for ways to “create jobs and simulate the state economy through technological advancements in the clean energy sector.”

Under the larger, looser collaborative, Darwin said each state and province is free to choose which of a variety of programs and policies it wants to pursue, including cap-and-trade. He expects some states, including California, to do that, but he said Arizona will not be one of them.

In a similar move in September, New Mexico, which like Arizona has had a change of governor since the state first pursued cap-and-trade, pulled out of WCI, and officials have indicated they may repeal a regulation previously established for the state’s cap-and-trade participation.

Even California has delayed for a year its proposed cap-trade program, which now is scheduled to begin Jan. 1, 2013.

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