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Pipeline Politics
Canada Proposes a National Carbon Price

The Trudeau administration proposed a national carbon price for Canada, setting a national price at C$10 per ton of carbon emitted in 2018, though that introductory level would rise to C$50 per ton by 2022. If the Canadian parliament passes this bill, the country’s provinces will get to decide how they enforce the new measure, either through a cap-and-trade system or a carbon tax.

As the WSJ reports, some of those provinces are protesting the idea:

In a sharp rebuke of Mr. Trudeau, Saskatchewan Premier Brad Wall decried the plan as a “betrayal” of joint federal-provincial efforts to work out a compromise on climate policy, and a move that would drain jobs away from the energy sector. “It’s not difficult to foresee an exodus of oil rigs south of the border, and fewer people working in Saskatchewan’s already-struggling oil and gas sector,” Mr. Wall said in a statement.

Alberta Premier Rachel Notley also rejected the federal plan, saying she wouldn’t accept it unless the federal government approves more oil and gas pipelines from her landlocked province. “Alberta will not be supporting this proposal absent serious concurrent progress on energy infrastructure, to ensure we have the economic means to fund these policies,” she said.

It’s noteworthy that Alberta, home to Canada’s massive oil sands reserves, has already unveiled a tax on carbon, set to go into effect next year, that will start at C$20 per ton before jumping to C$30 per ton in 2018. If that sounds surprising coming from a region whose economy is so tied up in oil production, consider the fact that oil sands producers are hoping that an accession to carbon pricing might win support for the construction of more pipelines to help get their product to market.

That said, there’s still clearly a concern in our northern neighbor over the potentially depressive effect that a steadily increasing carbon price might have on the country’s oil production. The Albertan oil sands are a particularly dirty, energy-intensive resource to plumb, so a carbon price could have an even greater effect in the province than it would elsewhere in the world.

But note that the Albertan premier isn’t rejecting the proposal out of hand. Rather, she’s pushing for this national policy to come with “concurrent progress on energy infrastructure,” better known as more pipelines. It’s a tough line to walk, but there could be a balance to be found there between protecting Canada’s energy security and curbing the country’s greenhouse gas emissions.

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