Alberta Reveals New Climate-Change Plan, Including Carbon Tax

Rachel Notley

By Maura Forrest

November 26, 2015

Alberta has released its new climate change strategy, including a carbon tax, renewable energy targets and a phase-out of coal-fired power.

The plan, released on Sunday, comes just days before the international Paris climate talks are set to begin. The Trudeau government has pledged to develop a national climate change strategy within 90 days of the conference.

Alberta NDP Premier Rachel Notley announced the province’s new strategy while surrounded by oil executives, environmentalists, academics and First Nations.

“This is the day we stop denying there is an issue, and this is the day we do our part,” she said, as reported by the Edmonton Journal.

The plan’s most notable feature is a carbon tax somewhat similar to B.C.’s, which would start at $20 per tonne in 2017 and increase to $30 per tonne in 2018, thereafter increasing at the rate of inflation plus two per cent.

That should cost the average household an extra $470 in heating, electricity and transportation in 2018, though the government has also promised rebates of some kind to the 60 per cent of Albertans with the lowest income.

But the NDP government has already come under fire for calling the tax “revenue-neutral.”

Revenue-neutrality is widely understood to mean that any new tax revenue collected by the government will be offset by tax cuts elsewhere. In B.C., the carbon tax has allowed for reductions to personal and corporate income taxes.

Alberta’s plan, however, makes no mention of tax cuts. Instead, all of the estimated $3 billion in annual revenue from the carbon tax will be reinvested, including in programs to improve energy efficiency and to promote green infrastructure.

“The Alberta carbon tax plan is not revenue neutral – not at all,” wrote Trevor Tombe, an economist with the University of Calgary, for Maclean’s. “Nothing in the report today suggests any existing tax will be lowered.”

According to the plan, Alberta will also phase out coal-fired power by 2030 and replace two-thirds of that capacity with renewables. The province aims to supply 30 per cent of its electricity with renewable power by 2030.

It also plans to cut methane emissions from oil and gas operations by 45 per cent from 2014 levels by 2025.

The government will also set a total emissions limit of 100 megatonnes per year, not including new upgrading and cogeneration facilities.