Alberta tables climate plan for industry; retains key parts of old legislation
It does not affect the federal consumer carbon tax, which will still go ahead on Jan. 1 and still faces court challenges
EDMONTON – Alberta has introduced a new climate plan for the province’s big greenhouse gas emitters that it says will achieve similar emissions cuts as the former NDP government’s plan and at less cost.
“Our projections are that we’re looking at getting similar results for less price for industry,” said Jason Nixon, environment minister for the United Conservative government.
It does not affect the federal consumer carbon tax, which will still go ahead on Jan. 1 and still faces court challenges.
The new plan, introduced in the Alberta legislature Tuesday, puts large industrial emitters under two regulatory regimes.
Most facilities, such as oilsands plants or concrete manufacturers that produce more than 100,000 tonnes of CO2, are to be assigned an individual carbon emissions benchmark based on past performance. Smaller emitters will be able to opt in to that program in order to avoid federal regulations.
The plants will be expected to reduce their emissions by 10% below the benchmark the first year and 1% every year after that. If they don’t, they will have to pay $30 a tonne or buy emissions credits. Facilities under their benchmark will be allowed to stockpile or sell credits.
Some of the money is to go into a fund to support greenhouse-gas-reducing technology. Half of every dollar raised after the first $100 million is to go to debt reduction or to the province’s “war room,” a newly created $30-million office to counter criticism of the oil and gas industry.
The new plan deals with electricity generators the same way as one that was introduced by the New Democrats.
Power plants – Alberta’s largest emitters and where most emissions cuts are expected to occur – will be assigned a single benchmark for the entire industry.
That approach is also available to other high-performing plants, which can choose to be regulated under a benchmark set by the best performance in their sector. Facilities that outperform that benchmark may not have to reduce emissions at all.
Government documents say the new approach could save industry up to $330 million a year.
Nixon said he expects the program to achieve about 32 megatonnes in greenhouse gas reductions. The New Democrat plan promised about 50 megatonnes, but that included a consumer carbon tax as well.
Terry Abel of the Canadian Association of Petroleum Producers welcomed the new plan. “The hybrid approach is probably the best way,” he said. “Each (emitter) is governed by unique circumstances.”
Abel also praised the focus on technology. He said industry is willing to do its part and just wants stable rules.
“We will always take and work with government to make any system work in the most efficient way possible.”
The two-pronged approach is a mistake, say policy experts. Jan Gorski of the clean-energy think tank Pembina Institute said setting individual benchmarks is “a step backwards.”
“It’s unfair and less efficient. It punishes companies that have had good performance that have already taken steps to reduce emissions and it rewards those that haven’t.
“(The new system) is not as strong as the old system.”
New Democrat environment critic Marlin Schmidt agreed.
“Right now it looks like it’s going to punish good players and reward bad players,” he said.
The plan doesn’t provide an incentive for high-performing companies to do better and will produce less revenue for climate initiatives, he added.
Nixon said individual benchmarks are necessary in industries that have to compete with other jurisdictions that may not have climate legislation.
“By going to (a hybrid system), we’ve been able to make adjustments to different industries.”
Gorski points out that both British Columbia and the federal government use one benchmark for each sector.
Nixon said preliminary indications from federal officials suggest the new plan will meet Ottawa’s requirements and stop the federal government from imposing its own backstop regulations for industrial emitters.
“We’re fairly comfortable with our conversations with them, that we’re at equivalency.”
That decision will ultimately be made by the federal cabinet. Ottawa requires carbon prices to increase $10 a year. No provision is made for that in the Alberta legislation and Nixon said that will be dealt with if and when it arises.