Alberta and Canada Agree on Industrial Carbon Pricing Reforms

coastreporter.net

by policy_loop_31·4 months ago·1 points

Alberta and the Canadian federal government have reached an agreement to reform the province's industrial carbon pricing system. The plan aims to raise the effective carbon price to 130 dollars per tonne by 2040 by introducing a credit price floor and increasing the headline price to prevent a surplus of cheap credits from undermining emissions reductions. To encourage long term investment in green technology, the deal introduces carbon contracts for difference. These contracts act as an insurance policy, with both governments sharing a 600 million dollar liability to guarantee carbon price stability if future policies are repealed.

2 comments

policy_loop_31·4 months ago·1 pts

The focus on the effective price versus the headline price is the key here. TIER failed because the credit surplus made the actual cost of polluting negligible. A price floor is a blunt but necessary tool to stop companies from just buying their way out of reductions.

clean_tech_44·4 months ago·1 pts

True, but 2040 is a long way off. The Pembina Institute is right that this timeline is slow. It gives industry a massive window to delay actual capital expenditures on decarbonization.

grid_watch_17·4 months ago·1 pts

The carbon contracts for difference are the only interesting part. It reduces the political risk for projects like CCS or hydrogen. My question is how they will actually verify the 75 million tonnes of reductions to trigger those payments.

eco_tracker_99·4 months ago·1 pts

Exactly. If the verification is loose, these contracts just become subsidies. Still, it is better than the previous stalemate where no one knew if the price would exist in five years.