On November 22 the Government of Alberta released a report prepared by the Alberta Climate Leadership Panel outlining its recommended climate change policy framework, including a number of specific actions to reduce carbon emissions in the province. The report and background materials can be viewed at: http://alberta.ca/climate/.
As summarized by the Sussex Strategy Group, the main policy recommendations in the Climate Leadership Plan include:
• Economy-wide carbon pricing - the Plan recommends that the province implement a price on carbon that broadens the current signal beyond just large industrial emitters to cover all aspects of the economy, including end-use emissions from transportation and heating fuels. The province proposes to phase in this pricing in two steps: $20/tonne in January 2017 and $30/tonne in January 2018. Revenues from the new regime will be used to implement other aspects of the plan, including incentives to renewable energy generation and consumer protection mechanisms. The plan estimates that such a regime could result in emission reductions of 50Mt by 2030.
• Oil and Gas emission limits – The Plan proposes an overall emissions limit of 100Mt from oil sands production. The Panel suggests that this caps the overall emissions from the sector while still allowing growth in the sector in the coming years – today the oil sands produces approximately 70Mt of emissions.
• Accelerated coal phase out – the Panel recommends policies which would phase out coal-fired generation in Alberta by 2030, well ahead of legislated federal coal retirement timelines, and replace at least 50-75% of the retired generation with renewable energy. The Panel recognizes that this accelerated phase-out could significantly reduce the operating lives of a number of coal facilities and re-confirms the government’s commitment to work to mitigate investor exposure as a result of this policy.
• 30% renewable energy by 2030 – As noted, the proposed policy framework suggests that at least 50-75% of retired coal generation should be replaced by renewable generation, namely wind, with a goal of 30% of the province’s electricity production generated from renewables by 2030. This would be facilitated through a competitive clean power call which would offer long-term incremental financial support from the government to supplement energy revenues from the market. The proposed recommendations are meant to work within the existing electricity market structure and complement the current rules governing it. Carbon revenues would be used to cover costs of the renewable energy incentives.
• Energy efficiency programming - Alberta is the only province in Canada without comprehensive energy efficiency targets. The Panel recommends that province work to implement energy efficiency standards and targets in an effort to reduce overall energy use in the province.
In a blog, The Delphi Group also summarizes the plan’s key points, along with raising some questions such as the following:
• How will the revenue be used and what mechanisms will it flow through?
• Will the existing technology fund continue to play a role in investing proceeds into new research and implementation projects, or will a new/different avenue be used?
• How will specific product/sector performance standards be set? Will they be based on international best practices or Alberta-specific measures? The blog can be viewed from the group’s home page, at http://delphi.ca/.
There is a lot to like in Alberta’s new climate plan, said another policy group focused in the area, Canadians for Clean Prosperity, but there are also some big concerns. Primarily that the government hasn’t been clear how it will use the revenue. “In fact, the government stopped being clear as soon as it claimed their plan was ‘revenue neutral.’ Just because the revenues are dedicated to specific new spending goals doesn’t make it revenue neutral. According to most economists, including University of Calgary’s Jennifer Winter, to be ‘revenue neutral’ all the revenue must be used to fund tax cuts. By this standard, this is not a revenue neutral plan.”
“Over time, for Alberta and Canada to meet their emissions reductions goals, the price of carbon will have to increase. Consumers and businesses will not accept to see even more of their dollars flow into government coffers. The government can allay this fear now by promising that every carbon dollar raised from consumer gasoline, electricity, and home heating will be refunded as direct consumer rebates.”
The group’s further comments can be read at www.cleanprosperity.ca/.