Alberta and the Canadian federal government have reached an agreement to raise the effective carbon price for industrial emitters to 130 dollars per tonne by 2040. The plan addresses a surplus of credits that previously drove market prices well below official headline rates, removing the incentive for companies to actually reduce emissions. To encourage long term investment, the two governments will implement carbon contracts for difference. This mechanism acts as insurance for green projects by guaranteeing a minimum carbon price, protecting investors if future policy changes repeal existing carbon pricing frameworks.
