Canada-Alberta MOU leaves emissions largely unchanged, new analysis finds | 440 Megatonnes

A new analysis from the Canadian Climate Institute finds that the Canada-Alberta Memorandum of Understanding (MOU) reshapes climate policy for over 40 percent of national emissions but delivers minimal emissions reductions. Modelling by Navius Research shows annual emissions ranging from 7 megatonnes below to 9 megatonnes above the pre-MOU trajectory through mid-century. The MOU weakens Alberta's industrial carbon pricing by cutting benchmark tightening rates in half, reducing compliance demand for carbon credits by 30 percent in 2030 and 60 percent in 2040. Expanded pipeline capacity adds roughly 20 megatonnes annually from higher oil production, which is not fully offset by other policy changes. The price floor design creates a surplus of low-cost credits that delays real abatement incentives. Early market signals show carbon credit prices dropping since the MOU was finalized. The analysis concludes that the agreement mostly delivers paper compliance rather than actual emissions cuts, leaving Canada's long-term trajectory well above what stronger cost-effective policies could achieve.