Alberta’s New Climate Plan: What You Need to Know

Home of the tar sands aims to cut emissions and tax carbon, a sign of Canada’s new direction heading into the Paris climate talks.

A flag is pictured as protesters demonstrate against the exploration of oil of the Canadian tar sands industry. Credit: Carl Court/AFP/Getty Images

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Alberta’s government unveiled a sweeping plan on Sunday to phase out coal, curb emissions from oil and gas, grow renewables and price carbon, marking a stark policy reversal for the province that is home to the tar sands, Canada’s ground zero of fossil fuel production.

“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,” Alberta Premier Rachel Notley said at a press conference in Edmonton. “This is the day we stop denying there is an issue. This is the day we do our part.”

With the United Nations global climate treaty talks starting in Paris next week, Alberta’s plan is the latest in a string of last-minute emissions-related goals and mandates being announced. Last week, the United Kingdom committed to phase out all of its coal-fired plants by 2025.

Alberta’s climate strategy is one of the first major policy announcements to come out of the province’s new government, led by the New Democratic Party for the first time. The strategy also comes on the heels of the Liberal Party’s victory in the federal election, which new Prime Minister Justin Trudeau won on a platform urging greater climate action.

Out of Canada’s 10 provinces, Alberta is the biggest source of greenhouse gas emissions by far. Its production of oil sands, one of the the fossil fuels with the biggest carbon footprint, is largely to blame.

Several recent setbacks, including plunging oil prices, which spurred industry layoffs and companies such as Suncor and Royal Dutch Shell to ditch plans for new facilities, and President Barack Obama’s rejection of the Keystone XL pipeline have sent the oil sands industry reeling. (In Notley’s speech, she referred to this rejection as a “kick in the teeth.”)

Additionally, there’s been increasing pressure to halt oil sands production for climate reasons. In June, more than 100 North American scientists posted an open letter to the government asking for a moratorium on production. “Continued expansion of oil sands and similar unconventional fuels in Canada and beyond is incompatible with limiting climate warming to a level that society can handle without widespread harm,” they wrote.

According to environmentalists, scientists and policy experts, the plan’s most important mandate is to cap Alberta’s emissions growth.

The strategy also involves closing down coal plants by 2030 and replacing that electricity with natural gas and renewable energy, primarily from wind. Following in the footsteps of other Canadian provinces such as British Columbia, Alberta will start taxing carbon emissions in 2017.

“Canada cannot solve its climate issue without Alberta doing something ambitious,” said Anthony Swift, director of the Canada Project at the Natural Resources Defense Council. He told InsideClimate News that the new climate strategy is a “tremendous step” in this direction.

“The Alberta plan represents an entirely different mindset. Until now, the mentality of the (previous) Alberta government was that someone else should worry about our children and climate, that their only responsibility was to maximize tax revenues, corporate profits and short-term jobs,” said Mark Jaccard, the lead author of the June oil sands letter and a professor at Simon Fraser University in Vancouver.

“Now, the mindset of this new government is that Alberta has the same responsibility to act on the climate threat as the rest of us … In many respects this is a wonderful development.”

Here is what you need to know about the plan:

What are the key components?

While many details remain undeveloped, there are four key mandates. First, the region’s 18 coal-fired power plants will be phased out by 2030 and that power will largely be replaced by renewable energy sources and natural gas. Second, Alberta will put in place an economy-wide carbon tax of $20 per ton of carbon dioxide equivalent starting in 2017 and that tax will gradually increase over time. Third, the province’s oil sands emissions will be capped at 100 million metric tons. Finally, Alberta aims to reduce its methane emissions from oil and gas operations 45 percent by 2025.

What does the strategy mean for the oil sands sector?

The cap on oil sands emissions is firm, but it does allow for some industry growth. Emissions are currently around 70 million metric tons, according to the Alberta government meaning the cap allows for some industry growth.

Under the carbon pricing plan, oil sands will generally be taxed $30 per ton, with some potential  wiggle room depending on operator performance. In other words, it might be possible for high-performing companies to pay less.

Who came up with this plan?

The Alberta government is spearheading the development and implementation. Shortly after taking office in May, Notley ordered the creation of a commission to devise climate policy recommendations before the global climate talks. The government held several open forums to get input from various groups including environmentalists, First Nations and industry groups. The resulting recommendations were published last week and an outline of Alberta’s climate policy was revealed soon after.

Why now?

For many decades, a conservative government ran Alberta, which strongly supported the oil and gas industry. The new government has “a different ideology,” that includes a commitment to addressing climate change, explained Kathryn Harrison, a professor who tracks environmental policy at the University of British Columbia. At the federal level, tar sands champion Stephen Harper was ousted and replaced by Trudeau’s more climate conscious government.

Keystone’s rejection added more external pressure, Harrison said, because it showed “that Canada’s poor reputation for addressing climate change, especially emissions growth from the tar sands, can actually hinder our access to markets.”

The Paris talks, according to Swift, added another pressure point “that made it all the more urgent for the new government of Alberta to come out with an ambitious plan quickly.”

How does Alberta’s strategy stack up with the other Canadian provinces?

Historically, Alberta has been resistant to climate action, but “this policy really catches it up in a big way,” said Swift. While Alberta follows other provinces in pricing carbon, including British Columbia, it’s the first to have that price steadily rise over time. (Quebec and Ontario use a cap-and-trade system.)

Alberta is also the first to tackle methane emissions from oil and gas, as well as to phase out coal. Alberta, however, still has the largest oil, gas and coal sectors of all 10 provinces.

What do people think of the plan?

Support for the plan has come from all sides, from environmentalists to energy companies including Suncor, Cenovus and Canadian Natural Resources Ltd.

Green groups such as praised it as a good first step, but called for more continued action. “Alberta’s climate plan is a big step in the right direction for a province that has spent so long on the wrong side of climate action. But, we still have a long way to go to reach the kind of climate leadership that Canada needs to meet our obligation to 2º C,” Cameron Fenton, oil sands organizer, said in a statement.

Policy experts including Warren Mabee similarly praised the move, but raised several questions about the implementation. “This is a very bold step by the government of Alberta … It makes sense but I think there are a number of details to be worked out,” said Mabee, an associate professor at the Queen’s Institute for Energy and Environmental Policy. “Will renewables be incentivized above and beyond the carbon levy (tax)?  How will the oil sands with its increasing footprint (at least as planned) offset the improvements they make in other areas?”

Anthony Swift similarly told InsideClimate News “the devil is in the details” and raised concern about how the oil sands carbon tax will work.

The Canadian Association of Petroleum Producers said in a statement that the plan “will allow the oil and natural gas industry to grow.”

Alberta’s opposition Wildrose Party, which previously denied the existence of man-made climate change, released a press release claiming the plan is a “tax on everything” that will lead to “job losses” and make “every single Alberta family poorer.”

A previous version of this story incorrectly stated that the New Democratic Party was victorious in the recent Canadian federal election. New Prime Minister Justin Trudeau is the leader of the Liberal Party.