Canadian Manufacturing

Alberta eyes higher carbon levy, critics call plan a smokescreen

Under current legislation, industrial facilities that emit more than 100,000 tonnes of carbon a year are required to reduce their carbon intensity



EDMONTON—Environment Minister Diana McQueen says Alberta is a long way from imposing higher carbon levies on its energy industry.

Responding to a story in the Globe and Mail, McQueen on Thursday acknowledged that she’s working with her federal counterpart on a new climate change policy. But she said those talks are preliminary and nothing specific has been determined.

“We are currently in the early stages of exploring a variety of options through a collaborative process with industry, the federal government and our department experts,” she said in a statement.

“These discussions are ongoing and revised targets have not yet been finalized.”

McQueen said last month that she’s asked her staff for a renewed climate change strategy. She added that could involve raising the province’s $15-a-tonne levy on greenhouse gas emissions.

Alberta consistently points to that legislation as unique in North America, but critics question its effectiveness.

Under the legislation, industrial facilities that emit more than 100,000 tonnes of carbon a year are required to reduce their carbon intensity—emissions per unit of production—by 12 per cent a year.

The $15-a-tonne levy applies only to carbon that exceeds what the facility would have emitted if it had met the intensity target. Groups such as the Pembina Institute suggest the levy actually works out to less than a couple of dollars per tonne averaged over a facility’s entire carbon output.

Companies that exceed their carbon allowance can also buy carbon offsets such as wind power to make up the difference. Some of those offsets cost as little as $8 a tonne.

Most independent experts and some government departments agree that neither Alberta nor the federal government will achieve their greenhouse gas reduction targets without substantial changes, including a higher price on carbon.

Still, McQueen said, the current levy has collected $312 million, with $181 million of that committed to 49 green technology projects.

New Democrat Rachel Notley doesn’t think an increase is in the cards.

“They have nothing to offer in terms of substance,” said Notley. “As a result, what we have is the environment minister briefly, publicly, talking about making a significant change and that gives the premier something to talk about.

“It’ll never happen.”

Notley likened the province’s effort to develop a new climate change strategy to other partially completed environmental initiatives.

The environmental monitoring plan for the oilsands remains without a solid funding plan or governance model. Crucial guidelines and regulations for a land-use plan in the oilsands region remain blanks.

Standards supposedly required for new oilsands projects such as Imperial Oil’s Kearl mine still aren’t in place.

“These guys talk and talk and talk and talk,” Notely said. “That’s 90 per cent of their environmental plan.”

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