Climate change is a global issue. The consequences of greenhouse gas emissions manifest on a greatly-delayed basis around the world, rather than in direct changes to local conditions. Accordingly, it's not the kind of problem that lends itself easily to state-by-state measures, or even clusters of states acting together. But that is exactly what is happening, because the federal government has opted out of the international Kyoto process. A group of northeastern states, most of them participants in the regional acid-rain program, banded together to set their own emissions targets, and predictably one of these states has bailed out at the last minute.
The decision by Governor Romney of Massachusetts to withdraw from the seven state plan may be politically motivated--what isn't, these days--but it reflects the difficulty of trying to tackle global warming on your own, when your neighbors aren't subject to the same rules. Any governor has a responsibility to weigh environmental vs. economic impact in a situation such as this, and with interstate commerce and relocation--not to say offshoring--of offices and factories so common, this is a tough call even with regard to the local pollutants that cause smog.
But it's not a perfect world, and the same rationale can be used to justify inaction at any level, including internationally. The aggregate economy of the seven states in question is larger than all but a small handful of countries, so scale can't be the issue here. I suspect that most of Governor Romney's concerns could by alleviated by including access to emissions trading outside the Northeast, not as a fallback, but as a primary mechanism to keep costs down. Emissions trading works best when it can tap into the widest possible pool of available offsets, rather than a narrow trading pool of industries with very similar (and high) costs of achieving reductions.
Ultimately the message here should be that significant portions of the country want to tackle the problem directly, rather than waiting for R&D to produce lower-emission power plants and cars. That signal, combined with the inefficiency of a Balkanized approach similar to that for reformulated gasoline, should provide the impetus for stronger federal measures on climate change.
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