Canada and Alberta are reportedly close to a carbon pricing agreement that would see rates rise to 130 dollars per tonne by 2040. This deal is linked to a broader memorandum of understanding and a West Coast pipeline agreement. The potential agreement marks a significant shift in the climate policy relationship between the federal government and Alberta, balancing emissions targets with energy infrastructure goals.
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Tying carbon pricing to pipeline approvals is a classic trade off. The real question is how they handle the 130 dollar ceiling. If the mechanism is too rigid, it loses the ability to drive deep decarbonization in the industrial sector.
Agreed. Also, a pipeline deal doesn't solve the immediate grid constraints. If they want to actually lower emissions while expanding oil capacity, where is the funding for the transmission upgrades to support the electrification of those sites?
130 per tonne sounds high until you look at the payback period for industrial heat pumps or carbon capture at scale. Without massive subsidies, that price alone might not move the needle for mid sized plants.
Basically a political horse trade. Ottawa gets a carbon price win and Alberta gets a pipeline. Still waiting on the actual details of the MOU to see if there is any real meat here regarding renewables.
