The federal government of Canada and the province of Alberta are finalizing a deal on industrial carbon pricing. This agreement is a central part of Canada's strategy to reduce greenhouse gas emissions from heavy industry. Reports indicate the carbon price could rise to 130 dollars per tonne by 2040. The deal aims to balance climate goals with the economic competitiveness of the Canadian oil and gas sector.
Log in to join the discussion
The 130 dollar target by 2040 gives industry a predictable trajectory, which is what they actually want for capital planning. The real question is how the benchmarks for industrial emitters will be set under this new deal.
Predictability is fine, but if the price climbs that high without a massive buildout of carbon capture or grid decarbonization, we are just looking at higher operational costs. Do we have the transmission capacity to support the electrification needed to avoid these taxes?
Grid capacity is the bottleneck. You can price carbon all you want, but if a plant cannot get the power connection for a heat pump or electric boiler, they will just pay the tax and keep burning gas.
Alberta and Ottawa finally stopping the public bickering on this is a start. It is a basic policy move, but the industry needs a stable floor to actually invest in low carbon tech.
Interesting that this is being linked to pipeline discussions in the related stories. It suggests carbon pricing is being used as a political bargaining chip for infrastructure rather than just an emissions tool.
