Alberta and the Canadian federal government have reached an agreement to address the failure of the provincial industrial carbon market. The plan targets an effective carbon price of 130 dollars per tonne by 2040, introducing a floor price for carbon credits to prevent a surplus from crashing the market and reducing the incentive for emitters to decarbonize. A key part of the deal is the introduction of carbon contracts for difference. These act as insurance for companies investing in emissions reduction technology, with the governments guaranteeing a minimum carbon price to protect against future policy reversals.
