The federal carbon tax could favour coal-fired power plants over clean sources like wind and solar in its approach to industrial emissions, a new report says, potentially undermining a central aim of the Liberal government’s policy.
Environment Minister Catherine McKenna released a regulatory proposal in December 2018 that provided details on the heavy emitters portion of the carbon tax, including how levies would be applied to electricity generators. Independent think-tank The C.D. Howe Institute reviewed the proposal and found it would actually give a leg up to higher-intensity emissions like coal and “diminish” investment in renewables, due to a decision to raise a critical threshold on certain producers.
“This is indisputably a carve-out for coal that departs from the principle of an economy-wide carbon price,” said Grant Bishop, who wrote a report on the institute’s findings published Tuesday.
The report could add weight to claims that the federal carbon tax introduced by Prime Minister Justin Trudeau does little to target high-intensity industrial emissions. It could also have an impact on coal-related emissions in Alberta, which still depends heavily on the fuel source to generate power.
The federal carbon tax applies in provinces that do not have their own emissions reduction policies in place — currently Saskatchewan, Manitoba, Ontario and New Brunswick. Premier-designate Jason Kenney has said he will repeal Alberta’s carbon tax after he takes office, which would mean the federal tax will also apply in that province.
The federal carbon tax is broken into two parts: an economy-wide tax on fuels like gasoline and diesel, and a heavy emitters tax, or output-based pricing system (OBPS), that will be applied to industrial polluters.
In December, McKenna released a regulatory proposal for the OBPS that would force coal-fired facilities to pay levies based on a threshold of 800 tonnes per gigawatt hour (GWh), compared with a threshold of 370 tonnes per GWh for natural gas. That higher target effectively provides more space for coal providers to sidestep levies, giving them a comparative advantage over natural gas or even emissions-free energy sources like hydro, wind and solar.
“The result of differentiating the benchmark is that a more GHG-intensive coal-fired power plant may pay less for each tonne of GHG emissions than a natural-gas fired power plant,” Bishop wrote in the report.
Ottawa has yet to release its final regulations on the OBPS, though it says it will be applied retroactively as of January 2019. The economy-wide fuel tax, meanwhile, was introduced April 1, 2019.
The economy-wide aspect of the carbon tax has been used by some provincial leaders to attack the federal government, and was a key issue for Kenney’s United Conservative Party in last week’s Alberta election. Ontario and Saskatchewan have already launched lawsuits against the feds on the constitutionality of the carbon tax, which observers expect to reach the Supreme Court of Canada.
Alberta has clean burning coal technology. Alberta companies have invested time money and energy into developing this technology which could be sold to other countries. At the plant at Sheerness Alberta the only thing that comes out of the stack is steam and I guess some CO2 which only helps the surrounding plant life. The microclimate around that facility is like an oasis in a desert. A beautiful cooling lake which people recreate on during the summer months. The water is slightly warm which makes water sports more enjoyable. Trees planted grow better and it would seem as if rain is drawn to the location. Hardly the environmental catastrophe that the left would have you believe. I don’t mind natgas fired generation but we have hundreds of years worth of coal sitting in the dirt and we can burn it clean. Fuck the left and lets’s do it because we do it right.
There are 18 coal fired generating stations through out Alberta
Of the 18 – 14 have the cleanest burning most updated carbon capture technology any where in the world already installed
2 are being converted over to natural gas at a huge cost to the power company which will be passed on to consumers through higher hydro rates
The other 2 are out dated and were already scheduled to moth balled To convert the remaining 14 over to natural gas by 2030 will cost $ billions
Which will in turn be passed on to the consumers We will end up with hydro rates comparable to Ontario
The AER estimates there are 91 billion tonnes of coal resources at depth suitable for mining. There is an additional 2 trillion tonnes of coal at depth in the Alberta Plains that may be suited for coalbed methane (CBM) exploration. Coal in the Foothills and Mountains would also significantly add to this tonnage.
Notleys NDP ruined Alberta’s once lucrative coal industry creating ghost towns out of whole communities that relied on coal mining as an industry and now the Liberals fvck up carbon tax which will leave NB 12 dirty technology coal fired plants exempt ???
Thank god for Kenny and the UPC Perhaps sanity and prosperity will prevail in Alberta again
‘NB 12 dirty technology coal fired plants exempt’
So vote buying in in NB? Federal Pork barrel politics are rampant in Canada.
Yup Pork Barrel Politics for votes in the East
Four of Quebec’s largest polluting industries cement, steel-making, lime and nitrogen fertilizer – are considered “high competitive risk” businesses Companies in those sectors will be entitled to a 90 per cent subsidy rate on their carbon tax burden according to that Bimbo Climate Barbie but “We can’t afford to let big polluters off the hook.” Like the farmers small business owners and soccer moms Fvckin twit
https://business.financialpost.com/commodities/energy/new-carbon-tax-subsidy-rates-divide-canadian-industries-as-ottawa-reduces-burden
We need coal. How else to deliver a lump to all those lyin, cheatin, Liberal politicos?
