June 28, 2015 by Rohan Nongpiur
Andrew Leach, Professor of Energy Policy, University of Alberta (first published by Macleans)
With last month’s election of Rachel Notley’s NDP in Alberta, it was clear that many things would be changing, in particular with respect to resource and environmental policy. As I wrote during the campaign, the NDP promised that it would, “take leadership on the issue of climate change and make sure Alberta is part of crafting solutions with stakeholders, other provinces and the federal government.” I wrote at the time that there was a lot left to define with respect to short-term and long-term policies affecting greenhouse gas emissions in the province. Defining these policies begins today, and I am pleased that I will have a small part in delivering on the premier’s promise that Albertans will be engaged in the development of the remainder of the policy package to be implemented over the coming years.
First, what policy changes are we seeing this morning? The government announced today that the Specified Gas Emitters Regulation, slated to expire next week, will be renewed and strengthened. While the current policy requires facilities to reduce emissions intensity by 12 per cent from baseline levels, the new policy will require a 20 per cent reduction. The existing policy allows firms to comply with the regulation by contributions to an innovation fund at a rate of $15 for each tonne of emissions over their facility-specific reduction requirement, and the new policy will raise this price to $30 per tonne. This means that the benefit to reductions in emissions within existing, industrial operations in the province will come to match the reward to similar improvements under the British Columbia carbon tax. It remains the case that the average cost imposed on industry (ass.uming constant performance over time) would be smaller than B.C.’s, at $6 per tonne, but the change in policy today implies that the average cost will be over three times higher than the average cost of emissions under the policy in effect right now. It’s a meaningful increase in stringency, and the minister of environment has signalled that, subject to the input the government receives in the months to come, it will be announcing further measures.
To that end, the government has also announced the creation of a climate change advisory panel with a mandate to report to the minister of environment early in the fall to aid in the formulation of a new climate change strategy for the province, and they’ve appointed me to chair the panel (it’s only fitting that I get the scoop on the announcement and the first quotes from myself, right?). This is a wonderful opportunity, and one for which I am really excited, but the challenge is daunting, so let me tell you a little about what comes next.
When you talk about climate change policy in Canada, Alberta and the province’s energy industry—the oil sands in particular—are among the most prominent topics. Alberta’s emissions represent a large and growing share of Canada’s emissions, and oil sands represent a large and growing share of emissions in Alberta. However, the greenhouse gas policy challenge in Alberta is about more than oil sands and more than large industrial emitters. The panel’s mandate is clear—deliver a comprehensive overview of greenhouse gas mitigation options across the economy. We’ve already seen discussions around energy efficiency programs for homes and business, as well as discussion on the future of Alberta’s electricity generation mix, and those topics will be considered in depth. We also plan to look at on—and off—road-vehicle emissions, fugitive emissions, emissions from agriculture, and emissions from waste management. While today’s focus will be on the changes to the Specified Gas Emitters Regulation, the panel will consider a much broader suite of potential actions to capitalize on opportunities for greenhouse gas emission reductions in all sectors across the province.
So, what will we do? Over the coming weeks, the panel membership will be finalized and dates will be scheduled for public consultations—creating opportunities for public engagement on Alberta’s climate change strategy is a core element of the panel’s mandate. We will also be reaching out to Alberta’s First Nations, to industry groups, to environmental organizations, as well as to subject-area experts within academia, government, and the private sector to make sure we are able to offer the minister a report that clearly provides options, complete with the best available evidence regarding both the benefits and costs of these options. It is my hope that our report will enable the government to make their decisions based on as thorough an examination of the evidence as we can provide, given the time frames involved.
As the premier has made clear, she expects to have a long-term climate change strategy in place for the province before she travels to the UN climate change conference in Paris in December. To meet this deadline, we’ll expect to provide a report in the fall for the government’s consideration. It’s a daunting challenge but this is a discussion that is long overdue in Alberta. We’re also not starting from scratch—there has been significant work completed both within and outside government, examining a variety of potential options for Alberta, and so this gives us a running start. We’ll need it.
Of course, taking on this role will also mean some changes for me. For one, I won’t be writing in this space for some time to come and some of my academic research will take a back seat for a few weeks (more apologies to my long-suffering co-authors will have to be written), but, as an academic, I don’t believe this opportunity is one to which you can say no. Our motto at the University of Alberta is Uplifting the whole people—a motto I take to imply that, among other things, we bring the expertise to bear on important policy problems facing the province when we can. When I teach environmental economics, and I’m sure many of my colleagues are like me, I use examples that begin with: “Imagine the premier calls you and asks for your advice on Alberta’s next climate policy. What would you tell her?” I can tell you that, when I ask my students what they’d tell the premier to do, I get wide and varied answers. I expect much the same from Albertans. We teach our students to consider the policy implications of research, and to apply that knowledge to real, pressing problems. I’m excited to get to live this in-class example.
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