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Alberta puts a price on carbon in sweeping climate change mitigation reforms

Alberta puts a price on carbon in sweeping climate change mitigation reforms

Photo by Reuters

23rd November 2015

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – The fossil-energy-rich Western Canadian province of Alberta on Sunday announced a far-reaching climate change plan that accelerates the transition from coal to renewable energy, puts a price on carbon pollution for everyone and sets emissions limits for oil sands.

"This is the day we step up, at long last, to one of the world’s biggest problems – the pollution that is causing climate change," Alberta’s New Democratic Party premier Rachel Notley stated in Edmonton, delivering on election campaign promises made earlier this year.

The announcement came a day before Canadian premiers met to discuss climate change in preparation for attending the United Nations climate change conference, in Paris, France, from November 30 to December 11.

The province’s plan, billed as ‘Alberta’s Climate Leadership Plan’ included achievable carbon pollution reduction measures, while using revenues from the plan to help Alberta adapt and thrive in a lower-carbon economy. 

Under Alberta’s ground-breaking plan, the province would aim to phase out all pollution created by burning coal and transition to greater renewable energy and natural gas generated electricity by 2030.

The coal phase-out would be governed by three principles, namely maintaining reliability, providing reasonable stability in prices to consumers and business; and ensuring that capital was not unnecessarily stranded.

Alberta undertook to replace two-thirds of coal-generated electricity with renewables – mainly wind power – while natural gas generation would continue to provide firm baseload reliability. Renewable-energy sources would comprise up to 30% of Alberta’s electricity output by 2030.

On Monday, Alberta’s Environment and Parks Minister Shannon Phillips and Health Minister Sarah Hoffman were joined by members of the Alberta Medical Association and the Asthma Society of Canada, supporting Alberta to phase out coal emissions.

From January 2017, the province would phase in a C$20/t economy-wide levy on greenhouse-gas (GHG) pollution, ramping up to C$30/t economy-wide in January 2018. The C$30 would add about C$0.07 to the cost of every litre of gas. The total cost of the increases would be about C$500 a year for an average family, the government stated.

That money – about C$3-billion in 2018 – would be used, in part, to rebate middle and lower income families. About 60% of households would have at least some part of their carbon tax bill repaid, the government assured.

Alberta also set a hard cap of 100 megatonnes on overall oil sands emissions, with provisions for new upgrading and cogeneration.

Further, in collaboration with industry, environmental organisations and affected First Nations, Alberta would implement a methane-reduction strategy to reduce emissions by 45% from 2014 levels by 2025.

The provincial government undertook to reinvest 100% of revenue from carbon pricing in Alberta.

A portion of collected revenues would be invested directly into measures to reduce pollution, including clean energy research and technology; green infrastructure, such as public transit; and programmes to help Albertans reduce their energy use.

Other revenues would be invested in an adjustment fund that would help individuals and families make ends meet and provide transition support to small businesses, First Nations and people working in affected coal facilities.

“We are going to do our part to address one of the world’s greatest problems. We are going to put capital to work, investing in new technologies, better efficiency and job-creating investments in green infrastructure. We are going to write a made-in-Alberta policy that works for our province and our industries and keeps our capital here in Alberta,” Notley said.

The plan was based on the advice of the Climate Change Advisory Panel, led by Dr Andrew Leach, who led a team that heard from thousands of individual Albertans and stakeholder groups this fall.

INDUSTRY REACTIONS
The Canadian Association of Petroleum Producers (CAPP) hailed Alberta's ‘Climate Leadership Plan’ as providing direction that would allow the oil and natural gas industry to grow, further enhance its environmental performance through technological innovation, and was expected to improve market access to allow Canadian oil to reach more markets.

"Improving market access for our oil and natural gas resources is one of the most pressing priorities of our industry to ensure that our sector can continue to grow and provide prosperity to Albertans and all Canadians,” CAPP president and CEO Tim McMillan said in a statement.

He added that the plan would further enhance the reputation of the sector and improve the province's environmental credibility as the industry sought to expand market access nationally and internationally. Further, the province's climate strategy might allow the oil and gas sector to invest more aggressively in technologies to further reduce per-barrel emissions.

“The framework announced will allow ongoing innovation and technology investment in the oil and natural gas sector. In this way, we will do our part to address climate change, while protecting jobs and industry competitiveness in Alberta,” oil sands miner Canadian Natural Resources chairperson Murray Edwards stated.

Four of Canada's largest oil sands producers, Canadian Natural Resources, Cenovus Energy, Shell Canada and Suncor Energy, lauded the climate-change plan, saying the measures provided predictability and certainty and would help ensure that producers could responsibly develop and grow this significant Canadian resource, while also addressing global concerns about climate change.

“The companies agree that this is a historic development for Alberta and Canada that will change the conversation about climate change, oil sands and infrastructure. They are proud to have worked with leading environmental organisations to better understand each other's views and recommend solutions for the oil and natural gas industry that helped inform the policy.

“By directing revenue generated from the new carbon pricing regime towards the development of potentially game-changing GHG reduction technologies, this made-in-Alberta plan lays the foundation for the province to become a global leader in addressing the climate change challenge. It also creates the conditions for Alberta's oil to become carbon competitive on the global stage and for Canadians to begin receiving full value for their oil exports,” the companies said in a joint statement.

"Alberta's methane-reduction goal sets the stage for a major win for Canada and the global environment. Leading oil and gas nations, including Canada, can have an immediate impact on the degree of warming our planet is facing right now. But regulations of new and existing sources are critical and feasible to achieve this goal. We will continue to push for the immediate regulation of these sources working with the government of Alberta and other stakeholders,” nongovernmental organisation Environmental Defence Fund (EDF) president Fred Krupp said.

“The world needs more of this kind of leadership from major energy producing jurisdictions if we are to avoid dangerous climate change,” Canadian environmental think tank Pembina Institute executive director Ed Whittingham stated.

EDF and the Pembina Institute had recently released an independent analysis undertaken by energy industry research firm ICF International, which showed that Canada's oil and gas emissions could be reduced by 45% below projected 2020 levels, in a cost-effective way, by using existing and readily available technologies.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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