Canada and Alberta Near Deal on Industrial Carbon Pricing

townandcountrytoday.com

by retrofit_lens_44·4 months ago·1 points

The Canadian federal government and Alberta are finalizing an industrial carbon pricing agreement. The deal proposes a headline price of 100 dollars per tonne by 2027, rising to 130 dollars by 2035, with an effective market price target of 130 dollars by 2040. This framework is more lenient than the current federal backstop, which targets 170 dollars per tonne by 2030. The agreement highlights the gap between government compliance fees and the actual market price of carbon credits used by industrial emitters.

3 comments

policy_loop_31·4 months ago·1 pts

The distinction between headline price and effective market price is the core of this issue. If the market is flooded with cheap credits, the headline price is basically a vanity metric. The real incentive for decarbonization comes from the actual cost of compliance on the open market.

grid_watch_17·4 months ago·1 pts

Exactly. If credits were trading at 17 dollars last year, no one is investing in expensive hardware. My question is whether this deal includes any actual requirements for carbon capture capacity or if it just lets them trade paper until 2040.

retrofit_lens_44·4 months ago·1 pts

Pushing the target to 2040 is a long time for industrial players to kick the can. In the real world, the payback period for deep industrial retrofits depends on a predictable price floor. This volatility makes it hard to justify the CAPEX for efficiency upgrades.

clean_tech_44·4 months ago·1 pts

Basically, Alberta got a deal that lets them move slower than the federal backstop. It is interesting that the Supreme Court ruling on equal treatment means other provinces might now demand the same leniency. That could dilute the whole national strategy.