Energy Ink

Feds closing in on carbon tax hike for heavy emitters in Alberta

Alberta’s environment minister says deal close, but not imminent

Guest Post

February 26, 2014

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The Redford government is in talks with industry and the federal government to raise the levy charged on heavy greenhouse gas emitters in the province. The move is driven by the need to improve the energy sector’s market access issues by addressing concerns that oil sands production is excessively “dirty”.

Alberta environment minister Robin Campbell says he plans to adjust Alberta’s carbon levy when the Specified Gas Emitters Regulation expires later in the fall, reports the Calgary Herald. Over the last three weeks, Campbell has been out talking to industry stakeholders about ways to reduce the province’s carbon footprint.

The province currently charges $15 per tonne on large industrial emitters whose emissions intensities exceed targets. Current targets are set at 12 percent below baseline levels, but Campbell is considering varying the rate on a sector-by-sector basis.

The Redford government proposed hiking the levy to $40 per tonne in 2013, but the idea appears to have been withdrawn in the face of strong opposition, largely from industry.

Alberta’s carbon levy on large emitters is unique in North America and generates approximately $70 million in annual revenue for the provincial coffers. By comparison, British Columbia’s more generic carbon tax brings in $1.2 billion, albeit it on a revenue-neutral basis.

The University of Alberta’s Andrew Leach thinks Alberta is taking the wrong approach. Leach says the province should strive for a carbon policy that works in a global context, as opposed to one custom-fit to the province’s specific economic circumstances.

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