Alberta has introduced enabling amendments to the Climate Change and Emissions Management Act that set the stage for the introduction of its promised Technology Innovation and Emissions Reduction (TIER) plan. TIER will replace the Carbon Competitiveness Incentive Regulation (Alta. Reg. 255/2017), which requires emitters of 100,000 tonnes of greenhouse gases or more to meet emission performance benchmarks or pay a price. TIER will do the same, albeit with more generous benchmarks. TIER takes effect January 1, 2020.
“Job creators don’t want Ottawa dictating industrial carbon pricing in Alberta,” Environment and Parks Minister Jason Nixon told reporters at an October 29, 2019 press conference prior to the introduction of Bill 19, the Technology Innovation and Emissions Reduction Implementation Act, 2019.
However, the only way Ottawa would dictate industrial carbon pricing in Alberta was if the province scrapped the Carbon Competitiveness Incentive Regulation without replacing it with legislation that delivered similar results. To do that, the United Conservative government had to break a campaign promise. Under TIER, the price of carbon will rise to $30 per tonne, matching the federal carbon price. The Party had campaigned on a $20 per tonne-price for industrial emitters.
Nixon said the move to $30 per tonne was made early in the consultation process, and came largely at industry’s behest. “It was as close to unanimous as I’ve ever seen in a consultation,” he said.
TIER sets performance benchmarks for various industry sectors and allows for the setting of facility-specific benchmarks. Regulated facilities are required to reduce their emissions by 10 per cent in 2020 and by an additional one per cent every year after 2020.
Electricity generators must meet a “good-as-best-gas” benchmark, where their emissions are equal to the cleanest natural gas-fired generation plant.
Emitters under the 100,000-tonne threshold may apply to join TIER and avoid the federal carbon tax.
Nixon expects TIER to produce emission reductions equivalent to the Carbon Competitiveness Incentive Regulation, at a much lower cost to industry.
Jan Gorski, analyst at the Pembina Institute, is not so sure. “Alberta has only committed to a price on emissions of $30 per tonne in 2020, without providing the long-term market signals that the federal system includes,” said Gorski in a statement.
Nixon refused to speculate on the direction of the carbon price post 2020. “We will be having that conversation with the federal government, and we will be having that conversation with industry,” he said. However, he is confident that Alberta’s TIER plan will satisfy Ottawa’s equivalency requirements.
Alberta and federal officials have been in regular contact during the development of TIER. The final decision on equivalency will rest with the federal environment minister, but “we’ve had every indication that we’ve met equivalency,” Nixon said.
Nixon also told reporters that TIER would remain in place even if Alberta were successful in its court challenge of the federal carbon tax on consumers.