Alberta (Canada) presents a new carbon taxation plan

The government of the Canadian province of Alberta (4 million inhabitants) has presented its new GHG emission reduction plan: the province will apply a CAD30/tCO₂eq (US$22.8/tCO₂eq) carbon tax on facilities emitting at least 100 kt/year of GHG from January 2020. It will concern about 127 facilities, including much of Alberta’s oil sands industry, as well as gas and coal-fired power plants, which will have to cut their GHG emissions by 10% in 2020 compared to their average emissions over the period 2015-2016. The reduction requirement will increase by an additional 1% per year thereafter. Companies failing to cut their emissions according to the target will have to pay the carbon tax on excess emissions.

Half of the revenues from the tax (estimated at CAD1.9bn (US$1.4bn) by its proponents) will be earkmarked to a Technology Innovation and Emissions Reduction (TIER) fund, which will finance research on new technologies. The government will use the other part of tax receipts to reduce its deficit, and finance the Canadian Energy Centre, a public agency focused on improving Alberta’s oil sands industry reputation.

According to the State Government, the new mechanism will allow Alberta to reduce its GHG emissions by 18% in 2030 compared to 2015 levels. But the main objective of the province is to shield Alberta’s industry from the federal "backstop" mechanism, which forces state governments to implement a carbon tax, which will rise by CAD10/tCO₂eq (around US$7.6/tCO₂eq) each year from CAD20/tCO₂eq (around US$15.3/tCO₂eq) in 2019 to CAD50/tCO₂eq (around US$38/tCO₂eq) by 2022. The Alberta government has lodged a constitutional lawsuit against the federal carbon tax.