Alberta and the Canadian federal government have reached an agreement to stabilize the provincial industrial carbon market. The plan introduces a floor price for carbon credits to prevent a surplus from driving down the effective cost of emissions, targeting an effective price of $130 per tonne by 2040. To encourage long-term investment in decarbonization, the two governments will implement carbon contracts for difference. These contracts act as insurance for companies investing in emissions reductions between 2030 and 2040, protecting them if future policy changes repeal existing carbon pricing regimes.
