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Federal Carbon Pricing Backstop Could Add 100 Mt to Alberta’s Coal Emissions by 2029

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The federal government’s carbon pricing backstop might actually slow down Alberta’s greenhouse gas reductions if it is eventually adopted in lieu of the province’s own climate plan, emergency physician Joe Vipond of the Canadian Association of Physicians for the Environment argues in an opinion piece for CBC.

Alberta expects its emissions from electricity generation to decline by eight megatonnes this year—a 3% reduction for the province, and “an incredible 1%” for all of Canada, in just one year, Vipond says. But while the pricing plan unveiled [1] by the federal government earlier this fall uses “essentially the same system” as Alberta, it fails to credit natural gas for being a cleaner fuel than coal, or emissions-free renewable energy for being cleaner than either.

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This seemingly small change will make a heck of a difference,” Vipond writes, citing economist Blake Shaffer. “The cleanest coal plants, despite being much, much dirtier than gas, and much, much, much dirtier than renewables, will only pay the equivalent of C$1 per tonne” for the carbon they emit. “In contrast, you and I, average Canadian citizens, will be paying a rate of $20 per tonne starting in 2019. With this thumb on the scale, coal plants will be incented to run before cleaner gas plants. And why rush to build new renewable energy when coal plants are going to be cheap enough to stay in the game for the long haul?”

Vipond attributes the discrepancy to pre-election politicking by a federal government that would rather subsidize coal than drive up short-term electricity prices. “Except, a long-term rise in electricity prices probably wouldn’t happen,” he explains. “The whole point of pricing carbon is to motivate behavioural change, and that applies to big utilities as well as individuals. With recent wind prices being as low as [3] 3.7¢/kWh, and solar prices plummeting below the cost of gas and even coal-fired electricity, it wouldn’t be long before Saskatchewan, New Brunswick, and Alberta transitioned to a cleaner, and cheaper, electricity grid.”

The problem is that, by then, Alberta might already have adopted the federal plan and given its coal plants an unwarranted break. “Both the governing NDP and the poll-leading United Conservative Party leaders have vowed to cancel our own pricing regime, thus triggering the federal backstop (Rachel Notley in 2021 and Jason Kenney after the provincial election),” Vipond writes. That decision would add 100 megatonnes to the province’s emissions if the last coal plant didn’t close until 2029, while introducing “incredible uncertainty” at a time when utilities are planning their future investments.