Early in his term, the governor agreed to pursue talks with other northeastern states to develop a Regional Greenhouse Gas Initiative. Proposed in 2003 by then-New York Governor George E. Pataki, the initiative sought to create market-based incentives to cut carbon dioxide, which scientists say is one of the leading contributors to climate change.

Business leaders, led by Associated Industries of Massachusetts and Raytheon Co., argued that the plan would hurt Bay State job growth. About a month before the deal was to be signed, however, Romney signaled his support for it, even recounting how he had dismissed concerns raised by a large Massachusetts corporation that the initiative would boost energy costs by 30 to 40 percent.

"It's a far more modest figure than that," Romney said at a green energy conference on Nov. 7, 2005. "The range of analysis is 1 to 2 percent. At 1 to 2 percent we can effectively create incentives to help ... stimulate a sector of our economy and at the same time not kill jobs."

But he soon changed his tone and began insisting that the measure include a price cap to limit how much any company would have to pay for excessive polluting — a provision that environmentalists said would undermine the market-based structure of the agreement.

"Despite their predictions of a small price rise, the other states and the environmental community were unwilling to agree to a cap," said Fehrnstrom, Romney's spokesman. "That was puzzling to us, and a little bit of a warning bell."

Nonetheless, officials in other states, environmentalists, and even some in Romney's administration were stunned by the governor's about-face.

"There was a point at which it became very clear to me and others that Massachusetts was not negotiating in good faith," said Franz Litz, New York's former climate-change policy coordinator.

To keep Massachusetts on board, negotiators from other states agreed over two hectic weeks to make changes to appease Romney. But the governor backed out anyway and said Massachusetts would set its own emissions regulations.

Romney today cites the concerns of that same large corporation as the reason for his decision.

"I had one of the very largest employers in our state ... say, 'By the way, if you sign without that cap, we'll never build another plant in this state,"' Romney said. "Well, I looked at that and said, 'Look, for a symbolic measure that's not going to do anything for the planet, I'm not going to move in that direction."'

"To this day, I'm sorry that I couldn't land my own governor," said Douglas I. Foy, Romney's chief environmental official. "But that was his decision to make and that's why he was elected governor."

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