UCP revisiting carbon price pledge
Calgary The Alberta government is no longer committed to the $20/ tonne price on carbon for heavy emitters it proposed in its election platform and is instead consulting with industry before setting the price under its planned new environmental regulations.
Environment Minister Jason Nixon announced this week the government is in the process of consulting with about 150 stakeholders from the oil and gas, agriculture and forestry, mining, chemicals and electricity industry on its proposal to reduce industrial greenhouse gas emissions. The proposal, known as TIER (the Technology Innovation and Emissions Reduction Fund) will replace the former NDP government’s Carbon Competitiveness Incentive Regulation (CCIR).
Not to be confused with the broad-based carbon tax on consumers, which the UCP has already scrapped, the NDP’S CCIR program applied to industrial operations that emit more than 100,000 tonnes of greenhouse gas emissions per year. Under the program, facilities had to reach certain emission reduction benchmarks to avoid paying a carbon levy of $30/ tonne. (Facilities could also choose to purchase carbon offsets or credits to avoid paying the levy.)
During the election campaign, the UCP called the NDP’S program a “cash cow” for government. (While Alberta has had a form of carbon pricing for heavy emitters since 2007, under the former Progressive Conservative government the price was set at $15/tonne. The NDP raised the carbon price to $20/tonne in 2016 and $30/tonne in 2017.)
The UCP also blamed the program for job losses and market uncertainty and pledged to reduce the carbon-compliance price for heavy emitters to $20/tonne.
But in a discussion document posted this week on the Alberta government website, the government said it is now “seeking input” on the TIER fund price. It is unclear whether that means the UCP is willing to move higher or lower than the proposed $20, but Jess Sinclair, a spokesperson for Nixon, said the goal is to be “flexible” in the terms of the program’s development.
“On the subject of the $20 figure, we want to ensure that we develop an approach that is Alberta-specific and takes the perspective of our heavy emitters into account,” Sinclair said in an email.
Under the UCP model, much of the revenue from TIER is to be used to fund Alberta-based technologies aimed at reducing carbon emissions, such as new oilsands extraction technology and carbon capture and storage research. (Some of the funds were also to go toward paying down the province’s deficit and funding the energy “war room” project.)
“Innovation and performance improvements are happening across Alberta’s industrial sectors. The proposed TIER system will recognize and accelerate this innovation, supporting investment and jobs,” said Energy Minister Sonya Savage this week.
However, Simon Dyer, executive director of the Pembina Institute, an energy and environmental think tank, said the UCP’S TIER proposal already amounts to a weakening of regulation for heavy emitters and any further lowering of the carbon price would be deeply concerning.
“Clearly the price needs to be maintained or increased, as the significance of climate change is only becoming more important over time,” Dyer said. “If the government frames this using the competitiveness angle, I’d actually say it’s the opposite. There’s a race on globally to provide the lowest carbon oil in the world, and if we do not have strong regulations we’re actually hindering our industry.”
Leah Ward, spokesperson for Alberta’s Opposition NDP caucus, said the UCP appears to be “wavering” on a campaign promise.
“The UCP government has demonstrated they have no plan to combat climate change or build consensus around our energy projects,” Ward said in an email.