Alberta’s new Climate Leadership Plan a game changer

Contributed by Richard Adamson
President, CMC Research Institutes

The opinions expressed are those of the author and do not reflect the official position of CMC Research Institutes or its board.

I had the distinct honor and very real pleasure to participate in the briefing and announcement on November 22 for the new, aptly-named Government of Alberta Climate Leadership Plan. It is clear that huge credit is due to the Climate Change Advisory Panel (Dr. Andrew Leach – Chair, Gord Lambert, Linda Coady, Stephanie Cairns, and Angela Adams) for having developed a solid, well-thought-out set of recommendations for government to work from. It is further clear that the deep listening the Panel did though its consultations has been matched by the Alberta government, which closely followed much of what was recommended.

As Dr. Leach indicated, the policies announced by the province are aligned with projections in the Panel’s report. There are no unsupported targets. The carbon prices set are based on comparables across a number of markets including Ontario, Quebec, B.C. and California. This path is not intended to set a level of ambition that would get Alberta to a point where, should the world follow the same route, we would be on track for a 2°C world. Alberta’s economy is heavily based on trade-exposed, high-emitting industries. You can only squeeze this balloon so hard before forcing activity to other, less regulated jurisdictions with lower standards of emission control and reporting. The objective therefore is to be aggressive enough to substantially address emissions within this jurisdiction without driving industries, including the fossil energy sector, out.

Door open to innovation

The announcement of the phase out of coal emissions by 2030 appears to leave the door open to the advance of innovations in emissions abatement technologies. After all, the fight is against climate change, not fossil resources. The declared intent to maintain reliable power and reasonable prices, and avoid unnecessarily stranding assets, along with treating affected workers and communities fairly, indicates that they have heard the concerns. As always, the implementation will tell all.

It does appear that the elimination of all coal fired power is regarded as a perfectly acceptable option, though it is heartening to see the above ‘faint hope clause’ to continue to encourage innovation in the sector.

The path to renewables may be challenging. The ambition declared in the pre-announcement briefing is “encouraging” at minimum 25% supply from renewable production. Taken with a 25% increase in capacity by 2030, this implies more than 25 GWh of renewable energy (that is actually delivered to users, not just potential). If we achieve an optimistic capacity factor of 25%, this amounts to well over 10 GW of new renewable capacity in 15 years. To achieve this with wind power alone, using very large (3 MW) turbines would require more than 3,800 new turbines installed, or more than 250 turbines per year. This is indeed an ambitious target.

Carbon price defines pathway for technology developers

The declared economy-wide carbon price of $20/tonne in 2017 and $30/tonne in 2018 with ongoing annual increments at some level above inflation is an excellent start and defines a pathway for aspiring developers of mitigation/abatement technologies. I look forward to seeing how far ahead of the inflation curve this level gets set. The plan to provide rebates by income group to 60% of the population to offset some or all of the expected impact of emissions pricing on energy costs appears to be both practical and well targeted. There will be further consultations, so the final numbers may change somewhat, but the principle is a good one. It was suggested in one Q&A volley that for the lowest income segment the rebates may exceed their costs due to carbon pricing.

The one disappointment with this carbon price is that government chose to add the phrase “from combustion sources”. This language is not included in the Panel report and appears to have been borrowed from the B.C. government’s carbon tax language. This language eliminates the most cost-effective mitigation measures associated with natural gas processing. When natural gas is produced it usually contains some quantity of CO2 that was resident with it in the formation. When processing the gas to meet pipeline specs this CO2 is stripped out. This already-captured CO2 is typically vented to atmosphere. Because it is often said that 80% of the cost of CCS is the capture cost, retaining the “from combustion sources” language the regulation removes any incentive to take advantage of some of the lowest of the low-hanging emissions mitigation fruit.

Methane regulations demonstrate leadership

The direct regulation of methane emissions is a clear and strong method for addressing venting, flaring and fugitives from all oil & gas sites. Reduction of emissions from these sources by 45% by 2025 is indeed consistent with a declared intent to demonstrate leadership. The choice of defined sources is completely understandable for a government bent on having unambiguous, measurable objectives. These are sources for which there is reasonably well-understood baseline data. However there is a great quantity of methane emissions for which the measurement and mitigation methods are still under development. (An example being fugitive emissions associated with legacy wells or poor cement jobs.) I would encourage the government to write the legislation in such a way that these methods can be incorporated as they are developed.

New plan a game changer

There is still a significant level of consultation promised, during which these and many other concerns may well be addressed. Given the level of thoughtful listening and deep consideration demonstrated to date, I would say the likelihood of coming up with a world-leading policy and regulatory regime is good.

It is truly heartening to see something called a “Climate Leadership Plan” that shows every sign of living up to its billing.

As Steve Williams, CEO of Suncor Energy said, “This is a historic day for the oil sands, for Alberta, and for Canada.”

This is indeed a game changer.

 

About the Author

For three decades Richard Adamson has facilitated the commercialization of innovative technologies. As CMC’s first President, Richard has been driving solutions to industrial greenhouse gas emissions through the global research network. He was recently honored to work with CMC’s Low Carbon Pathways group on the Canadian chapter of the international Deep Decarbonization Pathways Project.

  • http://www.esustainableplanet.com/ David G Malcolm

    This is exciting news for climate change mitigation in Canada. It throws the torch to innovators in the coal industry, who must face the challenge of reducing emissions so that coal resources can still have economic value. Through innovation the generation of new technology brought about by this game changer can lead to future wealth creation. Climate change mitigation need not be a cost to society.

    What has not been discussed in this CMC Research article and in other media announcements is that Adaptation to climate changes already underway is important. Adaptation is mentioned in several contexts in Alberta’s Climate Leadership Plan. Here is one example of a Police Recommendation in the report: “Require a Climate Mitigation and Adaptation Plan as a condition for new project approvals,” where Adaptation is mentioned right along with Mitigation as being of parallel importance.

    • http://cmcghg.com Richard Adamson

      David, thanks for taking the time to comment. I absolutely agree about the critical importance of adaptation. CMC’s mandate is to address the challenge of helping industry thrive in a low carbon world, so naturally we tend to emphasize mitigation. There are many facets to the challenge.

      • http://www.esustainableplanet.com/ David G Malcolm

        Thanks Richard. My main concern is twofold: First, that industry understand that the thriving may come as much through innovation and investment in adaptation (which will be required anyway) as well as in mitigation. And secondly, that the innovative mitigation/adaptation responses be viewed as investments in wealth creation, rather than as a cost of doing business just to be passed on to society.

        To whine and complain, rather than innovate about the cost, is like the little schoolboy whose excuse to the teacher is: “The dog ate my homework!”