Alberta’s new climate plan includes economy wide carbon tax in 2017

The Canadian oil sands province of Alberta adopted a plan to reduce its GHG emissions. Rachel Notley, Premier of Alberta, announced a new climate strategy at a press conference in Edmonton on Sunday (Nov. 22). The main feature of Alberta’s Climate Leadership Plan, based on the advice of the Climate Change Advisory Panel, is the introduction of an economy wide carbon tax. Starting in 2017, the new carbon tax will be applied across all economic sectors, covering around 90% of provincial emissions. The price will begin at 20 Canadian dollars (C$) per ton on January 1, 2017, jump to C$30 per ton on January 1, 2018, and increase in real terms thereafter.

According to the province’s estimates, the average household will spend C$320 more in 2017 and C$470 more in 2018 on expenses including electricity, gasoline, and heating. The estimated C$3 billion generated as revenue annually will be reinvested in clean technology and green infrastructure, as well as used to help support the transition of those working in the coal industry.

In addition to the carbon tax, the Plan will help accelerate the transition from coal to renewable energy resources, set emissions limits for the oil sands, introduce programs to improve energy efficiency, support green technology, reduce methane emissions, and provide support to families and small businesses.

According to a government news release, the Plan includes:

Electricity and renewables

  • Alberta will phase out all pollution created by burning coal and transition to more renewable energy and natural gas generation by 2030.
  • Three principles will shape the coal phase-out: maintaining reliability; providing reasonable stability in prices to consumers and business; and, ensuring that capital is not unnecessarily stranded.
  • Two-thirds of coal-generated electricity will be replaced by renewables – primarily wind power – while natural gas generation will continue to provide firm base load reliability.
  • Renewable energy sources will comprise up to 30 per cent of Alberta’s electricity production by 2030.

Carbon pricing

  • A price on carbon provides an incentive for everyone to reduce greenhouse gas pollution that causes climate change.
  • Alberta will phase in this pricing in two steps.
    • $20/ton economy-wide in January 2017
    • $30/ton economy-wide in January 2018
  • An overall oil sands emission limit of 100 megatons will be set, with provisions for new upgrading and co-generation.

Methane reduction

  • In collaboration with industry, environmental organizations, and affected First Nations, Alberta will implement a methane reduction strategy to reduce emissions by 45% from 2014 levels by 2025.

Revenue neutral

  • One-hundred per cent of proceeds from carbon pricing will be reinvested in Alberta.
  • A portion of collected revenues will be invested directly into measures to reduce pollution, including clean energy research and technology; green infrastructure, such as public transit; and, programs to help Albertans reduce their energy use.
  • Other revenues will be invested in an adjustment fund that will help individuals and families make ends meet; provide transition support to small businesses, First Nations, and people working in affected coal facilities.

Premier Notley stated on the Alberta Government website, “Responding to climate change is about doing what’s right for future generations of Albertans – protecting our jobs, health and the environment. It will help us access new markets for our energy products, and diversify our economy with renewable energy and energy efficiency technology. Alberta is showing leadership on one of the world’s biggest problems, and doing our part.”

According to Reuters, Alberta’s energy sector is undergoing pressure due to slumping global oil prices.

The new Plan will replace the current carbon levy on heavy GHG emitters in Calgary, which aims to reduce emissions intensity by 12%, where cities that choose not to limit emissions or buy offset credits must pay C$15 for every ton over their target; a price that will increase to C$30 by 2017.

 

 

(Image: Premier Rachel Notley announcing Alberta’s Climate Leadership Plan on November 22. Photo credit: Rachel Notley/Twitter)