Today the Alberta government announced its Climate Leadership
Plan (Plan) and released to the public the Climate Leadership
Report to Minister (Report) it commissioned from the Climate Change
Advisory Panel. While details of the Plan's implementation and
the extent to which the government adopts the specific
recommendations of the Report remain to be seen, the key policies
of the Plan are as follows:
An Alberta economy-wide price on
greenhouse gas (GHG) emissions of $30/tonne.
The phasing out of all coal-fired
electricity generation by 2030, to be replaced by electricity
generation from renewables and natural gas.
A methane reduction strategy to
address methane emissions in the oil and gas sector.
A cap of 100 megatonnes (MT) on GHG
emissions from oil sands operations, subject to certain exceptions
for cogeneration power sources and new upgrading capacity.
Central to the Plan is broad-based carbon pricing based on the
Panel's proposal to replace the existing emission intensity
based Specified Gas Emitters Regulation with a Carbon
Competitiveness Regulation (CCR).
Under the proposed CCR:
The price of carbon in 2017 will be
$20/tonne, escalating to $30/tonne by 2018, with the potential for
annual increases equal to inflation plus two percent, depending on
the cost of carbon in competing jurisdictions.
Elements of cap and trade and carbon
tax regimes are used, depending on the type of GHG emissions, which
fall into two basic groups: emissions from large industrial
emitters and end-use emissions.
Large industrial emitters consist of
facilities that emit more than 100,000 tonnes of GHG emissions
annually, as well as aggregated oil and gas production facilities
or gas processing plants whose GHG emissions do not meet such
threshold but who choose to opt-in to such regime. Large emitters
are to be allocated emissions permits based on sector specific
top-quartile performance with such allocations decreasing at a rate
ofone to two percentannually to account for expected energy
End-use emissions are characterized
as GHG emissions from the combustion of transportation and heating
fuels. The price of carbon is assessed on distributors of such
fuels (much in the same way the British Columbia carbon tax is
applied) to account for the emissions which will result from the
combustion of such fuels by end-users.
Complementary Policy – Electricity
Under the Plan:
Commencing in 2018 coal-fired
generators will pay $30/tonne on emissions above what Alberta's
cleanest natural gas-fired plant would emit for equivalent power
By 2030 all coal-fired generation
will be phased out, with such capacity to be replaced two-thirds by
renewable energy and one-third by natural gas, such that by 2030 30
percentof Alberta's electric power will come from renewable
Complementary Policy – Oil & Gas
Noting that the climate change impact of methane is 25 times
greater than carbon dioxide over a 100-year period, the Plan
contemplates a 45-percent reduction in methane emissions in Alberta
Under the Plan:
New methane emissions design
standards will be created and applied to new oil and gas
A five-year voluntary Joint
Initiative on Methane Reduction and Verification will be
implemented with industry and other groups, tasked with improving
standards for venting and fugitive emissions from existing and new
facilities, including through improved measurement and reporting
On-site combustion (i.e.,
flaring) at conventional oil and gas facilities will be subject to
the carbon pricing regime starting in 2023.
Cap on Oil Sands GHG Emissions
In addition, the Alberta government announced plans to introduce
a legislated oil sands emissions limit of 100MT per year, compared
to current oil sands GHG emissions of approximately 70MT per year.
The Plan states such 100MT limit will be subject to exceptions for
cogeneration and new upgrading capacity.
In addition to the foregoing, the Plan contemplates further
emissions reductions through the implementation of a province-wide
energy efficiency program.
The release of the Plan comes on the eve of the First
Ministers' meeting, during which Canadian climate change policy
will be discussed. On November 30th, the Canadian delegation,
including Premier Notley and Prime Minister Trudeau, will attend
the United Nations Climate Conference in Paris (COP 21). Prime
Minister Trudeau has indicated that a further First Ministers'
meeting will be held within 90 days of COP 21.
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