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Alberta’s climate change policy heralded by environmentalists and energy companies

November 23, 2015   by Canadian Press

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Alberta’s climate change policy will introduce an economy-wide carbon tax, a hard cap on greenhouse gas emissions from the oil sands and steps to phase out coal-fired power generation by 2030.

“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,” Premier Rachel Notley said as she announced her government’s new policy in Edmonton on Sunday.

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“I’m hopeful these policies will lead to a new collaborative conversation about Canada’s energy infrastructure on its merits and to a significant de-escalation of conflict worldwide about the Alberta oilsands.”

Both energy companies and environment groups support the new plans.

“The framework announced today will allow the ongoing innovation technology, investment and growth in the oil and gas industry at the same time we are looking to reduce overall carbon emissions,” said Murray Edward of Canadian Natural Resources.”

“I think the world needs more of this kind of leadership,” said Ed Whittingham of the clean energy think-tank the Pembina Institute.

Starting in 2017, Alberta will apply a $20-a-tonne price on carbon emissions that will cover about 90 percent of the economy, including gasoline and home heating fuel. That price will increase to $30 in 2018.

That $30 will add roughly seven cents to the price of a litre of gas.

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The government calculates an average family will spend an extra $500 a year on gas and home heating, but about 60 percent of households will have some of their carbon tax bill repaid.

Extra revenue from carbon emissions–about $3 billion in 2018–will be used in part to rebate middle and lower income families.

The rest will go to programs to ease the transition away from coal for communities and workers dependent on that industry, as well as to innovation programs and energy efficiency measures.

Eventually, said Notley, the carbon taxes could be dedicated toward paying down public debt.

Large emitters will continue to be regulated based on their carbon emissions per barrel of oil, although those requirements will be more stringent.

By 2030, about 30 percent of Alberta’s power will come from renewables. A mediator will be appointed to work out the contentious details of plant closures with power companies, who were not represented at the announcement.

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The oil sands will be limited to a total of 100 megatonnes of emissions–about 30 megatonnes more than the industry now emits. That gap will be largely filled by projects now being built.

So if oil sands producers want to pump more oil, they’ll have to do it in a way that stays under the cap.

The government calculates its provisions should reduce emissions from business as usual by about seven per cent by 2020, and about 16 per cent by 2030.

Mark Jaccard, an energy economist at Simon Fraser University, called the plan a prudent mix of sound economics and real-world pragmatism that creates incentives for emissions reductions.

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“I need to look at the details, but I think I’m seeing some real leadership here,” he said.

“It’s not the economist’s perfect (model), but it’s real-world. I’m seeing policies I like.”

The announcement is the result of months of consultation and study by an expert panel convened to help the government write the policy.

University of Alberta energy economist Andrew Leach led the panel, which received thousands of pages of submissions from citizens, industry and environmental groups.

This story was originally published by Canadian Insurance Top Broker.