Alberta tweaks greenhouse gas rules, promises more substantive changes ahead

The Alberta government has tweaked its greenhouse gas reduction rules now with a promise of a complete policy on reducing climate change-causing emissions a few months down the road.

EDMONTON — The Alberta government has tweaked its greenhouse gas reduction rules now with a promise of a complete policy on reducing climate change-causing emissions a few months down the road.

“Some will argue that we aren’t going far enough on these issues,” NDP Environment Minister Shannon Phillips said Thursday. “I say to them we are serious about making progress.

“Some will argue we are moving too far and too fast. I say to them that more of the same would be the worst thing we could do for our energy economy and for the future of our province.”

The new policy leaves intact the previous government’s policy of taxing carbon based on production levels, often referred to as carbon intensity. That means even under Thursday’s changes, the province’s total emissions are unlikely to fall for years.

“It’s very challenging to imagine absolute emissions peaking and coming down in the next five years,” said Ed Whittingham of the clean energy think-tank the Pembina Institute, who was at the podium with Phillips.

Large emitters will now be expected to cut their emissions by 20 per cent per unit of production by 2017. That’s significantly higher than the current expectation of 12 per cent. The cost of any emissions that exceed their allotment will double by 2017 to $30 a tonne.

That fine only applies to carbon dioxide releases over the allowed level. The real price of carbon emissions in Alberta will only rise to about $6, said Phillips, or between 30 and 45 cents per barrel of bitumen — far lower than what most economists believe is needed to drive absolute cuts.

Government estimates suggest that will reduce emissions by about five megatonnes compared to what they would have been under the current policy. Alberta currently releases about 267 megatonnes of carbon dioxide equivalent a year.

But Phillips also announced a sweeping review of all of Alberta’s climate change measures, to be conducted together with an energy royalty review.

The climate review will be led by Andrew Leach, a University of Alberta energy economist who has published widely on the issue and has also worked with the federal government on climate policy.

“My mandate’s not to come to a particular set of recommendations,” Leach said. “(We want) to get a sense where Albertans want to go in terms of a goal, to challenge some of those goals in terms of ’Are you also happy with the policy that would get you to that goal?’ and to try to come to a reconcile position.”

Leach is to table his report in time for the international climate change meeting in Paris this December.

Whittingham called Thursday’s announcement a good first step, but put Leach on notice about what he’ll be looking for.

“How are you going to accelerate the phase-out of coal-fired generation? What are you doing to ensure renewables get a fair share of the replacement generation? What are we doing to ensure we create micro-generation? What are doing to ensure we have a credible price on carbon?

“We need to move to a system that is going to drive reductions.”

Mike Hudema of Greenpeace agreed.

“(We) are glad the change to the existing carbon pricing regulation is just an interim measure,” he said. “Much more substantial policies need to be implemented.”

Liberal Leader David Swan offered similar caveats.

“I look to the minister and to this review in this next couple of months to actually tell Albertans honestly when we’re going to start to see carbon levels in the atmosphere in Alberta reduced. All we’re doing here is slowing the acceleration.”

Meanwhile, Progressive Conservative Leader Ric McIvor worried about the impact on business.

“This is more uncertainty for the industry,” he said. “We’ve got a royalty review, we’ve got (corporate income) tax increases, we’ve got this (climate review) and we’ve got Alberta leaking investment like a sieve.”

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