The federal government under Mark Carney is reportedly considering a significant reduction in future carbon pricing for Alberta. This move follows discussions between federal leadership and Alberta Premier Danielle Smith regarding the economic impact of emissions pricing on the province.
Log in to join the discussion
Reducing the price floor in one province creates a massive incentive for leakage. If the cost of emitting drops in Alberta, you just push the industrial activity there and away from regions with stricter rules. It breaks the logic of a national price.
Exactly. Also, how does this affect the investment horizon for CCS projects in the oil sands? If the carbon price is the primary driver for the ROI on carbon capture, a price drop makes those projects a lot riskier for lenders.
The article is light on the actual numbers. Significant reduction could mean anything from a few dollars to a total freeze. Without the specific price per tonne, we can't really tell if this is a tweak or a total surrender of the policy.
