Massachusetts is one of nine states slated to be part of the agreement, but Romney’s chief of staff, Beth Myers, has called at least three other participating states in the last month saying the administration was deeply worried about key aspects of the plan, according to the sources.
On Friday, state Secretary of Commonwealth Development Douglas Foy asked the other states in a conference call to delay a planned Dec. 1 announcement until Dec. 15, and representatives of the other states agreed as long as negotiations continued, the sources said.
The delay and the call were confirmed by a third source yesterday; all three declined to be named because of the sensitivity of the negotiations over the agreement.
News of the delay comes two weeks after Romney indicated his overall support for the initiative at a conference in Boston, calling it ”good business" because it would prompt Massachusetts companies to develop state-of-the-art clean-energy technology.
Since then, power plant owners and other businesses have intensified their lobbying, urging Romney to reject the deal, which would freeze power plant emissions at their current levels and then reduce them 10 percent by 2020. The critics’ chief concern has been that the deal would send energy costs higher.
Though New York has led talks on the pact, known as the Regional Greenhouse Gas Initiative, Massachusetts is considered a critical component to its success, and a decision by Romney not to participate would undercut what environmental groups, some businesses, and other supporters have touted as a watershed agreement to combat global warming.
Romney indicated earlier this month that he had concerns about the project, but exactly what they were became clear yesterday. The sources said he wants to include a price cap on how much power plants would have to pay to emit certain amounts of greenhouse gases, a proposal that other negotiating states and environmentalists have staunchly rejected. A Romney spokeswoman said that a cap was his biggest priority.
”Governor Romney believes we should reduce our greenhouse gas emissions, but we need to make sure that we do not harm the energy-consuming businesses in Massachusetts," said spokeswoman Julie Teer. ”The governor wants to continue the discussions on [the initiative] until an agreement is reached that makes sense environmentally, for employers located here, and for the energy consumers."
Rhode Island is also wavering on the agreement, the sources said. Officials there did not return phone calls yesterday.
The Northeast states have been hammering out their plan for 2 1/2 years. The prospective deal is being watched closely by environmentalists, regulators, and utility industry officials around the country as the first major effort to bypass President Bush’s refusal to enact strict limits on carbon dioxide emissions from power plants. Carbon dioxide traps heat in the atmosphere, and many scientists say the earth is heating up more rapidly because of man-made releases of the gas. In addition to New York and the New England states, Delaware and New Jersey are part of the emissions plan.
The intense debate over the greenhouse gas initiative is also rife with political implications. Romney and Governor George Pataki of New York are both weighing a 2008 presidential bid, and the agreement would to some extent put their states at odds with the Bush administration. Bush declined to sign the Kyoto Protocol, an international treaty designed to stem global warming. Organizers of the Northeast pact were hoping to sign the agreement in time for a key climate change meeting in Montreal early next month with Kyoto participants and observers.
At a clean-energy conference in Boston on Nov. 7, Romney sounded exuberant about the Northeast state agreement, saying in his speech that it was ”a great thing for the Commonwealth."
”We can effectively create incentives to help stimulate a sector of the economy and at the same time not kill jobs," he said.
Later that day, however, Romney outlined to reporters several fears he had about the proposed agreement. After the Globe reported Romney’s remarks the next morning, Romney aides expressed concern that the governor’s speech had been misinterpreted as an endorsement of the pact.
Environmentalists said yesterday they feared that Romney’s concerns were delaying tactics aimed at killing the entire program. The regional plan rests on limiting overall emissions and then letting companies buy or trade individual credits for every ton of carbon dioxide they emit. Environmentalists say putting a price cap on each ton, as Romney wants, would discourage companies from lowering emissions because they could simply buy the right to pollute even after the cap is reached.
”Raising this issue is troubling and unnecessary," said Dale Bryk, senior attorney with the Natural Resources Defense Council.
Environmentalists have been lobbying hard for Romney to sign the proposed agreement, he said. ”Every issue was discussed – we had a two-year public process so everybody could participate in that conversation, and price caps were not seriously considered."
In addition to the price caps, the overall cost of the program to businesses and individuals has been vetted in recent weeks. Last week, a study commissioned by initiative organizers indicated that individual household bills would rise nominally, somewhere between $3.01 to $33.23 annually over the next 15 years under the agreement. In his speech two weeks ago, Romney downplayed concerns from business leaders that the agreement would send energy prices skyward, citing analyses showing energy prices were unlikely to increase beyond 1 or 2 percent.
But industry officials say they believe the price would increase much more, especially if energy prices remain high. The new study ”has certainly confirmed our view that this is a very complicated regulatory structure, and it has in our view significant price impacts," said Robert Ruddock, general counsel for Associated Industries of Massachusetts.
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