Province may hike carbon levy amid push to cut greenhouse gas emissions

Alberta is facing intense scrutiny of its environmental record and oilsands policy while the United States wrangles over the proposed Keystone XL oil pipeline. Photograph by: Ryan Jackson Ryan Jackson , Edmonton Journal

Alberta is facing intense scrutiny of its environmental record and oilsands policy while the United States wrangles over the proposed Keystone XL oil pipeline.
Photograph by: Ryan Jackson Ryan Jackson , Edmonton Journal

Alberta is considering raising its carbon levy on heavy industry, extending who pays the fees and linking to other provinces’ greenhouse gas emissions markets, says Environment Minister Robin Campbell.

Campbell made the remarks in a speech to a carbon management conference in Calgary this week, promising as well new initiatives to enhance energy efficiency in the province.

The minister wasn’t available to comment Thursday but his press secretary, Kevin Zahara, said the Progressive Conservative government is signalling it needs to “move quicker” on CO2 reductions.

“We know that the eyes of the world are on us,” Zahara said.

“We’ve had some discussions with industry and we’ve indicated that we need to move forward and address some of these issues.”

Alberta is facing intense scrutiny of its environmental record and oilsands policy while the United States wrangles over the proposed Keystone XL oil pipeline.

The final State Department environmental report on TransCanada’s $7-billion proposal is expected to be released soon, setting the stage for a final decision by U.S. President Barack Obama.

Alberta is missing its own internal greenhouse gas reduction targets, but the province says it is delaying an overarching climate change plan while waiting for the federal government’s emissions regulations for the oil and gas sector. In December, Premier Alison Redford said there was some frustration over the holdup from Ottawa.

Zahara said Alberta wants to work with the federal government but also wants to move forward on its own. The current Specified Gas Emitters Regulation — which imposes the carbon levy — expires in September.

In a copy of Campbell’s prepared remarks, the minister said the government is contemplating whether it should “adjust” its current $15 per tonne levy on large emitters who fail to reduce their emission intensity by 12 per cent below baseline levels.

The 12 per cent target could also be shifted, with the possibility of varying targets for different industrial sectors, Campbell said.

Last year, the PC government put forward to Ottawa the idea of a $40 carbon fee based on industry reducing emissions intensity by 40 per cent, although Redford maintained it was never a formal proposal.

The Pembina Institute’s Simon Dyer said the idea fizzled under lobbying pressure from the energy industry.

But Dyer, who attended Campbell’s speech, said he was glad to hear the minister outline areas the province is examining after a long period of silence.

“Moving on strengthening climate policy is the single best way that Alberta can enhance its potential for market access and enhance its reputation internationally,” said Dyer, Alberta director for the environmental think-tank.

“The world knows that Alberta’s emissions are going up and policy isn’t strong enough. There’s a clear road map to improving things if Alberta chooses to proceed.”

Campbell said the province is also looking at whether it should lower its existing threshold for who pays the carbon fee. The levy is applied to facilities that generate 100,000 tonnes or more of carbon dioxide.

The minister said Alberta must also consider whether to open its current system — which sees facilities within the province trade emissions credits and buy offsets among themselves — to permit transactions with players outside Alberta.

While some money might flow out of the province, it could also bring dollars into Alberta, he said.

“We need to think about whether Alberta should shift from an isolated climate policy to one of enhanced collaboration,” Campbell said in his speech.

“We are currently considering whether more formal climate change linkages should be made.”

University of Alberta energy economist Andrew Leach, who also attended the conference, said it would be a major shift for the province to link to offset markets in other jurisdictions.

Leach said that as the government contemplates increasing its carbon levy, it does have room to move.

“Almost every operator in the oilsands will tell you they have stress-tested their projects, their projects are viable at a $40-per-tonne carbon price,” he said.

“For most oilsands operators, that would be under $1.50 a barrel.”

The Pembina Institute is part of a coalition of industry and environmental groups that released a report this month saying Alberta could get halfway to its own greenhouse gas emission targets through basic energy efficiency steps.

Dyer said he was heartened to see Campbell promise action on the issue.

Zahara said he could not provide details on what energy efficiency initiatives are being planned, but they will be likely made public during the upcoming sitting of the legislature, which begins March 3.

 

Source: CalgaryHerald.com

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