More Alberta "Carbon Tax" madness

Yesterday's Calgary herald also calls the SGER penalty for emissions beyond regulated targets a carbon tax (see last two posts for more on this), and talks briefly about the politics behind it all, federally and provincially:

The goal is to paint Harper and Alberta green so the federal Conservatives can go to the polls this spring without having to attack the prime minister's own province.

There could still be fireworks if Harper's own green plan, coming soon, imposes rules tougher than Alberta's.

Alvarez says, "the biggest outstanding question right now is how the provincial and federal programs are going to interact."

Harper might push a bit harder than Alberta to show his own shade of green. But whatever he does, it's likely to be something Premier Ed Stelmach can accept after mild protest.

Go figure - a carbon tax crafted right here at home (Calgary Herald)

De facto Canadian carbon taxes

The Globe and Mail has a story today on Harper and Stelmach's recent announcements re carbon sequestration investments (the CO2 pipeline etc.), but what caught my eye was a reference to "Alberta's new carbon tax". They are referring to the $15.00/tonne charge on emissions beyond the targets included in the new proposed "Specific Gas Emitters Regulation" (SGER - say that ten times real fast). The article then goes on to say that the Harper Conservatives are also expected to adopt a $15/tonne tax on emissions beyond regulated limits.
I guess they are right to call it a tax (economists of the world, feel free to correct me on this), but it provides little of the benefits of a true carbon tax, since it will only apply on emissions beyond regulated targets - in Alberta's case, the first 88-98% of a facilities emissions will be
untaxed. I will remain indefatigably optimistic about this, since at least the words "Alberta's new carbon tax" are actually being bandied about matter of factly in a national newspaper - a vital psychological watershed in carbon tax acceptance. Next stop, 80-150$/tonne taxes on all fuels sold in Canada, followed smoothly by the abolishment of income taxes and free photovoltaic backpacks for the whole famdamily!

Ottawa advised to underwrite carbon technology (Globe article)
Get your (not so free) solar backpack today!

Alberta announces regulations for LIEs based on emissions-intensity

Alberta announced its new (proposed) Specified Gas Emitters Regulation (SGER) yesterday, part of Bill 3, a proposed amendment to the Climate Change and Emissions Management Act. SGER requires facilities that emit more than 100 000 tonnes of GHGs (CO2e?)/year to reduce their emissions intensity by 12% starting July 1 2007, or else

• buy Alberta-based offsets
• buy "emissions performance credits" from other emitters (who receive these credits in exchange for having achieved a lower intensity than their target)
  
• contribute to an Albertan technology fund at $15.00/tonne over their target

The Pembina Institute is quoted as saying that the proposal is "an absolute joke", while the Canadian Association of Petroleum Producers (CAPP) is saying that few if any of the 100 facilities covered will be able to achieve the reductions, meaning that they will have to pay hundreds of millions of dollars into the technology fund.
Some more details about SGER

• lower targets for new facilities: facilities opened in the last 8 years have lower targets initially - 10% if you are 8 years old, 8% if you are 6, down to 2% for facilities in operation four years or less
• Offsets may be open to double-counting: details on qualification, methodology, etc. aren't in place, but the only requirement in the proposed regulation that covers additionality is a condition that the emissions reduction used as an offset not have been required by law. This leaves open the possibility that reductions funded by other provincial or federal initiatives could be used as an offset within the SGER system.
• Baseline intensity will be an average of 2003, 2004 and 2005 emissions, except for new facilities, which will use their third year of operations
• No longer-term targets - the Minister can change targets and the legislation expires in 2014, but no schedule of targets is set out in the SGER legislation.
  

Alberta Ministry of the Environment press release
National Post coverage
Pembina news release

My comments: I have to agree with Pembina here - intensity targets, especially such low targets applied to an industry that has such huge growth, are barely going to slow down our GHG increases. (Pembina calculates that the SGER will allow a doubling of tar sands emissions by 2010 relative to 2003). Meanwhile, I'm wondering why Alberta has come out with this, especially so soon before the federal announcement. I assume its meant more as a bargaining chip/preemptive strike than a real system - Alberta's 100 emitters are too few to make for a liquid emissions trading market, and I don't think this system as it stands could be easily linked to larger carbon markets, if at all. I also don't think that the Albertan system could meet "equivalency" requirements for soon-to-be-announced federal system. The Federal Conservative strategy is likely to recycle the Liberal LFE system, with slightly more stringent targets, so we should expect 15% or higher intensity targets at the federal level. And the national system will also give access to offsets from across Canada and (maybe just maybe) international credits. So is this just an attempt to stake some ground, with an eventual goal of forcing reductions/exemptions from the feds? Or will Alberta make this a big issue to stand its ground on? Anyone with a better sense of Albertan politics (or devious political maneuvering in general), feel free to enlighten me.