As Alberta's new provincial government looks to assert
itself as a leader on climate change issues, it recently announced
that it is taking meaningful steps to achieve real, demonstrable
reductions in the province's greenhouse gas (GHG) emissions. In
addition, Premier Rachel Notley has made it clear that she expects
to have a long-term climate change strategy in place for the
province before she travels to the United Nations Climate Change
Conference (COP 21)
starting in Paris on November 30, 2015. To that end, Alberta's
Minister of Environment and Parks, Shannon Phillips, announced on
June 25, 2015 that the government is taking a two-step approach to
climate change policy renewal.
As a first step, Alberta's existing GHG regulation, the Specified
Gas Emitters Regulation (SGER), has been renewed with more
stringent levels that will apply from 2016. The SGER came into
force in 2007 and was originally set to expire in September 2014.
The regulations were extended without change by the former
Progressive Conservative government, first to
December 31, 2014 and then to June 30, 2015.
Currently, Alberta requires any facility that emits 100,000
tonnes or more of carbon dioxide equivalent (CO2e) a year to reduce
their emissions intensity by 12%. This level is set to
15% as of January 1, 2016; and
20% as of January 1, 2017.
A regulated entity can achieve compliance in one of four ways:
(1) meeting its
target through the implementation of operational efficiencies,
(2) Alberta-based emission offset credits, (3) emission performance
credits, or (4) contributing $15 per tonne to the
Climate Change and Emissions Management Fund (the Fund).
For regulated entities looking to pay into the Fund, higher
compliance costs are on the horizon:
in 2016, $20 for every tonne over a facility's reduction
in 2017, $30 for every tonne over a facility's reduction
This increase will bring the cost of carbon in Alberta into line
with British Columbia's carbon tax, which currently sits at $30
per tonne of CO2e.
As a second step, an advisory panel has been established to
undertake a comprehensive review of the province's climate
change policy. Chaired by Dr. Andrew Leach (Associate Professor and
Academic Director of Energy Programs at the University of Alberta
School of Business), the advisory panel will consult stakeholders
(including industry groups, First Nations, environmental
organizations, and subject matter experts within academia,
government, and the private sector) and report to the Minister of
Environment in the early fall to assist the government in
formulating a new climate change strategy for the province. It is
understood that all options will be on the table, including a
carbon tax and a cap-and-trade scheme that could potentially link
with other jurisdictions. Over the next few weeks, advisory panel
members will be finalized and dates will be scheduled for public
consultations. Dr. Leach has indicated that while the average cost
imposed on industry (assuming constant performance over time) will
be smaller than BC's at $6 per tonne, the change in policy
means that the average cost will be over three times higher than
the average cost of emissions under the current policy. The
NDP's campaign platform may provide an indicator of things to
come – overall GHG reductions from the oil and gas sector,
phase-out of coal-fired electricity, expansion of renewable energy
sources (including wind, solar and co-generation), and
implementation of an energy efficiency strategy. From the
government's standpoint, its commitment to a higher carbon
price and more stringent emission reduction targets will lend
credibility to and underpin the climate change policy measures it
will be introducing in the coming months.
Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
The Government of Alberta recently announced a number of policy changes that will impact the Alberta Electricity Market, composed of its generators, transmitters, distributors, retailers, electricity consumers and wholesale electricity market.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).