NEW YORK – California Gov. Arnold Schwarzenegger announced a partnership Monday to reduce greenhouse gas emissions by allowing power plants in California and Northeastern states, including Maine, to trade emissions credits.

Schwarzenegger said he would sign an executive order on Tuesday that calls for a program allowing his state to work with the Northeast’s Regional Greenhouse Gas Initiative. Maine is one of seven states participating in RGGI, which has a goal of reducing carbon dioxide emissions at power plants starting in 2009.

Under the program, power plants in participating states will be granted a limited number of carbon credits, equal to the amount of carbon dioxide they are allowed to emit. Those that exceed their limits must purchase credits to cover the difference, while those that produce less carbon dioxide can sell the surplus credits.

The partnership is the first step in creating a system that helps California’s largest manufacturers comply with stricter environmental regulations. Industrial corporations and utility companies in the state must cut their greenhouse gas emissions by roughly 25 percent by 2020 as part of a landmark global warming law.

Linking California to the Northeast program could help California power plants meet their obligations under that state’s new law.

“Our cooperation can be a model to the rest of the states and to other countries actually,” California Gov. Arnold Schwarzenegger said after he and New York Gov. George Pataki toured a green residential building in Lower Manhattan touted as one of the country’s largest and first “green” residential high-rise building.

Maine companies also would benefit from a partnership with California, according to state officials.

David Littell, commissioner of the Maine Department of Environmental Protection, said RGGI rules allow power companies to buy or sell credits within any of the participating states. Adding California to the mix would be an “extraordinary development” because of the enormous size of the market.

“It will open the entire California market to them to sell their offset credits,” Littell said in an interview.

Pataki said that a “market-driven cap and trade system” would benefit both the environment and industry.

The other Northeastern states involved in RGGI are Connecticut, Delaware, New Hampshire, New Jersey, New York and Vermont. Maryland is expected to join in June 2007.

Bangor Daily News writer Kevin Miller as well as Associated Press writer Samantha Young in Sacramento contributed to this report.