Arizona nixes trade in western climate market

WASHINGTON (Reuters) - Arizona Gov. Janice Brewer's office said on Thursday the state will not participate in a regional cap-and-trade emissions program led by California due to the tough economy.

"Arizona will not implement the (greenhouse gas) cap-and-trade proposal advanced by, the Western Climate Initiative (WCI), which begins on January 1, 2012, particularly during this economic downturn," said an executive order issued by Brewer said.

The regional cap-and-trade system would limit emissions and allow companies and speculators to trade permits to pollute in order to meet regulations. Opponents say the system could raise short-term energy bills for consumers.

Fast-growing Arizona could fare poorly in such a system. Its carbon dioxide emissions rose 61 percent from 1990 to 2007, the largest increase in the country, according to a report late last year from Environment Arizona.

Arizona will continue to be a member of the WCI, which includes California and other Western states, and four Canadian provinces, the order said. It will also participate in The Climate Registry, in which polluters can disclose emissions and actions taken to lower them. But companies will only be asked to join voluntarily.

Regional emissions trading systems have emerged on the coasts amid a vacuum of federal action on climate. The U.S. House of Representatives passed a climate bill that includes a cap-and-trade system in June, but the legislation has been delayed in the Senate and faces an uncertain future.

(Reporting by Timothy Gardner; Editing by Marguerita Choy)