Tuesday, November 24, 2015

Alberta's New Climate Plan is a Quantum Leap Forward

The new NDP government in Alberta led by Premier Rachel Notley has announced sweeping reforms to the province's energy sector that are intended to balance the economic concerns with climate concerns. The plan includes an economy-wide price on carbon, the phase out of coal and a commitment to renewables and energy efficiency.

The former leader of Alberta, Progressive Conservative Premier Jim Prentice was a Federal Minister of Environment in the Harper Conservative cabinet. His federal and provincial track record on the environment and climate change was less than impressive.

When he was in power, Prentice said he supported the idea of  “the provinces [finding] common ground on energy and the environment, and [enforcing] fair, clear, well thought-out rules,” but he never offered any concrete action. Between 2010 and 2014 Alberta invested a mere $2.3 billion in renewable energy.

Under the former provincial government of premiere Prentice Alberta generated an average of 249.3 Mt CO2 representing 35.7 percent of Canada's greenhouse gas (GHG) emissions. Alberta's high levels of GHG emissions were due largely to the tar sands, Canada’s fastest-growing source of emissions. Between 1990 and 2013 the province's GHGs increased by 53 percent.

"Our goal is to become one of the world's most progressive and forward-looking energy producers," said the new Alberta Premiere. "We are turning the page on the mistaken policies of the past, policies that have failed to provide the leadership our province needed."

Alberta has a long history of oil spills, but the most egregious climate crime emanate from attempts to expand the tar sands. The collapsing price of oil has made the tar sands far less viable as has the failure to build pipelines. Efforts to expand the tar sands have been impeded by President Obama's cancellation of the Keystone XL, and domestic resistance to the other pipelines (the Energy East, Northern Gateway, Kinder Morgan). The new federal Liberal government has promised a careful review of the nation's pipeline projects.

The tar sands have been significantly undermined by low oil prices and this has wreaked economic havoc on the province of Alberta and the nation as a whole. There have been 37,000 job losses in Alberta and the provincial economy is in recession.

Alberta has the dirtiest oil on the planet and the expansion of the tar sands will negate global efforts to reign in climate change. The tar sands have been called "filth" by Archbishop Desmond Tutu and "hypocritical" by Canadian Rock legend Neil Young who compared the tar sands mining operations to Hiroshima

The federal government's complicity with the tar sands industry began to unravel with the election of the NDP and the subsequent rejection of the Harper Conservatives. There are a number of lessons that can be learned from the Conservative's failed bet on fossil fuels. Under the former provincial government Alberta has not capitalized on opportunities to drive the province forward.

In 2007, the Conservative provincial government of Alberta government implemented a token carbon tax of $15/tonne for large emitters. Shortly after coming to power in 2015 the new NDP government announced that it will double the province’s carbon tax on large emitters by 2017. Under the new framework the province's 103 major GHG emitters (largely from the fossil fuel industry) must lower their emissions by 20 percent below baseline, with a $30-per-tonne levy for emissions above that target.

Although this represents progress in the right direction it has been criticized as inadequate. “It’s not going to drive the meaningful reductions or give the market incentives that we need,” said Ed Whittingham, executive director of the Pembina Institute. Pembina advocates for a $40-per-tonne levy with a 40 per cent emissions reduction target.

There are three options for companies that exceed their emissions quotas:
  1. Carbon offsets
  2. Alberta Emission Performance Credits (similar to carbon offsets but rewarded based on performance) 
  3. The Climate Change and Emissions Management Fund, which funds climate change projects
The new government of Alberta has put together a climate change panel, chaired by Andrew Leach, the University of Alberta environmental economist. The panel will examine a wide assortment of potential actions and deliver a report to the government. 

Alberta’s new climate plans were announced on Sunday November 22. The plan includes the phase out of coal-fired power by 2030 (the province currently has 18 coal-fired electricity plants that generate 55 percent of the province’s electricity) and cuts to methane emissions from flaring and leakage by 45 per cent from 2014 levels by 2025. The plan will also provide incentives for renewable energy with the goal of getting nearly one-third of power generated from renewables by 2030.

"Alberta is leading again," Ms. Notley said. "The government of Alberta is going to stop being the problem and we are going to start being the solution."

In addition to phasing out coal power, reducing methane emissions and incentivizing renewables, the NDP's newly announced climate rules will impose a 100-megatonne cap on carbon emissions from the tar sands (it currently emits 70 megatonnes annually). There will be an economy-wide tax of $20 per tonne on carbon-dioxide emissions starting in 2017, rising to $30 in 2018.

"The oil-sands emissions limit will give the world certainty that our emissions will not grow unchecked. It’s a game changer and will change the debate about the oil sands industry doing its part to address climate change," said Ed Whittingham, executive director of the Pembina Institute, an environmental think tank.

Energy Minister Margaret McCuaig-Boyd said the province’s NDP government will both take a leadership role on the climate-change file and stand up for Alberta’s energy industry. The fossil fuel industry knows that change is coming and it wants clarity. This has prompted TransAlta Corp., Suncor Energy Inc., Shell Canada, Cenovus Energy Inc. Canadian Natural Resources Ltd to support the NDP's new climate rules.

The NDP's climate-change policy puts Alberta on track to reduce emissions by approximately 20 megatonnes in 2020 and 50 megatonnes by 2030.

The new carbon tax is expected to raise $3-billion annually by 2018 Some of the new revenue will be spent on a green climate fund that will spur technology to fight climate change and an "adjustment fund" to help lower earning people in the province to cope with the changes. The average household will see heating and transportation costs increase by $470 annually by 2018. In addition to the rebates afforded by the adjustment fund, the $3 billion raised by carbon taxes will go towards building green infrastructure and public transit. The government will also create efficiency programs to help people reduce their energy use.

"We need to step up to the climate change issue,” Notley said. “The simple fact is this: Alberta can’t let its emissions grow without limit....But we can grow our economy by applying technology to reduce our carbon output per barrel. And that is what this limit will promote" 

"This is the day that we set a better course for our economic future," Notley said. "This is the day that we start to mobilize capital and resources to create green jobs, green energy, green infrastructure and a strong, environmentally responsible, sustainable and visionary Alberta energy industry with a great future … This is the day we stop denying there is an issue, and this is the day we do our part."

Catherine McKenna, federal Minister of Environment and Climate Change: “This is a strong, positive step in the right direction. We want to send a clear signal to Canadians and our partners around the world that Canada is back and ready to play our part ... Alberta is taking a leadership position on phasing out coal, and as Minister of Environment and Climate Change, I will be looking at ways to help accelerate the reduction of coal power right across the country."

Greenpeace applauded the move by the new government of Alberta but they said that they would like to see emission reduction targets.

"Targets give an important signal to business, let the world know where Alberta is headed, and help ensure that direction leads to the reductions that science and equity demand," said spokesman Mike Hudema, climate and energy campaigner for Greenpeace. He went on to say, "These policies are important first steps, but much bigger emission reductions will be needed for Alberta to do its part to keep global warming below two degrees Celsius."

The proposed emissions cap and will not be enough to keep temperatures from warming more than the internationally agreed upon upper threshold limit of 2 degrees Celsius. To ensure we can meet this target we will need to freeze tar sands expansion.

Nonetheless, Al Gore said, "This is also another powerful signal — well-timed on the eve of the Paris negotiations — that humanity is beginning to win our struggle to solve the climate crisis."

Related
Canadian PM and Provinces Unified for COP21
What Canadian Provinces are Doing to Combat Climate Change
Saskatchewan to Get Half of its Energy from Renewables
Canada's Provincial and Territorial Governments Draft Principles for a Clean Energy Strategy
The Merits of Carbon Pricing in B.C.
Canada's Green Provincial Report Card

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