10 Things Albertans Might Actually Like About Their Carbon Tax

Calgary Green Line LRT Carbon Tax

It’s been a full six months since Alberta introduced its economy-wide carbon levy and the sky has not fallen.

In fact, unlike what many politicians and pundits were predicting ahead of the implementation of the $20/tonne carbon levy, the cost of gasoline at the pumps hasn’t spiked — and has in fact been consistently lower than when politicians like Jason Kenney and Derek Fildebrandt made photo ops by filling jerry cans ahead of January 1, the date the carbon tax took effect.

The question now is less about whether the carbon price is going to be implemented, and more about what the revenue — $3.85 billion over three years — is actually going to pay for.

Here are 10 ways carbon levy revenues are being used to create a better quality of life and lower emissions in Alberta.

1) Calgary’s New Green Line: $1.53 Billion

On July 6, the province committed  $1.53 billion to Calgary’s massive Green Line LRT. The investment will be released over eight years, entirely from revenue generated by the carbon levy, and lead to completion of the first stage of a brand-new north-south transit line by 2026.  

2) Municipal Solar Program — $5 Million

Alberta plans to generate 30 per cent of its electricity by 2030 via renewables, which has understandably generated a lot of attention on utility-scale power plants, such as wind and solar farms.

But a considerable amount of electricity is used every day by municipal buildings throughout the province, including offices, community centres, fire halls and police stations. Many of these buildings serve as ideal settings for installing solar panels due to their large, flat roofs.

So Alberta is helping incentivize solar investments via a rebate system for every watt of installed capacity, for up to 20 per cent of expenses or $300,000 per application. A similar program has also been established for solar panels on farms.

3) On-Farm Energy Management — $10 Million

Speaking of agriculture, the Alberta government has also expanded the On-Farm Energy Management program to help subsidize energy efficiency investments that reduce emissions and increase competitiveness (to the tune of covering 70 per cent of expenses).

The list of coverable expenses includes things like: variable speed drives for pumps, fans and compressors, energy-efficient lighting, high-efficiency tankless water heaters, greenhouse energy curtains, greenhouse carbon dioxide recovery programs and high-volume low-speed circulation fans.

Originally, the program only covered 35 per cent of eligible costs to the maximum of $50,000. But thanks to the additional funding, the government now covers up to 70 per cent to the maximum for $750,000. In addition, the program now covers 100 per cent of the first three sub-meters, used to track energy consumption.

The program has been so popular that it’s no longer accepting applications, and has requested even more funding from the government to meet the demand.

4) Household Rebates — $1.5 Billion

A popular critique of carbon pricing is that it unfairly punishes lower income people, costing poor people a higher percentage of their income and leaving even fewer options to, say, buy a newer and more fuel-efficient car or furnace.

Thankfully, Alberta has integrated well-designed rebates into the design of the carbon levy, channelling $410 million in 2017-18 to household rebates.

Two-thirds of Albertan households have already received partial or full rebates, depending on their income levels. Consumers who pollute less than average actually make money from the rebates.  

Over three years, the household rebates will amount to $1.5 billion.

5) Indigenous Climate Leadership Programs — $35 Million

Another huge series of investments specifically involves First Nations and Metis communities in Alberta, with a total of seven programs funded with revenue from the carbon levy.

Those programs include the Alberta Indigenous Solar Program, Alberta Indigenous Energy Efficiency Retrofit Program, Alberta Indigenous Green Employment Program and Alberta Indigenous Community Energy Audits Program.

These initiatives aim to bring many of the best opportunities in renewables and energy efficiency to First Nations reserves and Metis settlements across the province.

For instance, the solar program provides grants for up to $200,000 per project for buildings that are owned by organizations and communities, including schools, medical centres and offices. Another $14 million was specifically designated for energy efficiency projects.

6) Technology Research for Methane Reduction — $40 Million

Okay, we know this one sounds kind of boring, but stay with us because it’s funding some pretty innovative things.

Here’s the deal: methane is a huge component of natural gas. It also just so happens to be super potent for the atmosphere (with 84 times the global warming potential as carbon dioxide over a 20-year period). And Alberta generates a lot of the stuff from oil and gas activities, because it gets vented in all sorts of ways once you start digging around under the earth’s surface.  There’s also lots of methane from agriculture (cow farts, basically) and diseased trees.

Now for some good news: Large emitters that fail to cut emissions enough to meet specific targets pay into a fund for research projects to help cut methane emissions from oil and gas, agriculture, power generation and forestry.

Emissions Reduction Alberta will award $40 million to applications via a competitive bidding process, with a max of $5 million per applicant.

On July 7, Emissions Reduction Alberta announced it had picked a dozen projects, with approved funding of up to $29.5 million.

Here’s an example: ZKO Oilfield Industries got $2.8 million in funding to demonstrate an in-pipe turbine generator that uses flowing natural gas to generate electricity, which is then used to power chemical injection pumps, eliminating a large source of methane venting in natural gas production. Cool, huh?

Another example: Viresco Solutions got $1.46 million to demonstrate a feed ingredient for cattle that significantly reduces cattle-based methane emissions (aka make them less gassy).

The ingredient can be introduced to regular feeding regimes to reduce the methane produced by each animal, enabling substantial reductions in emissions from Alberta’s beef and dairy industries,” says the project description.

Then there’s Titanium’s project ($5 million) to design an oilsands tailings treatment system that eliminates certain tailings streams while recovering bitumen, solvent and high-value minerals. By preventing solvent and bitumen release, the vast majority of methane emissions from mined oilsands operations can be reduced.

7) Bioenergy Producer Program ($60 Million)

Of all renewable energy options on the table for country-wide deployment, bioenergy is probably the one most easily forgotten. But it already plays a notable role in Canada: at the end of 2014, it sported 2,043 megawatts of generating capacity, more than solar power with 1,843 megawatts of installed capacity.

The thing to know about bioenergy is it’s no one thing. It can include burning wood byproducts, capturing methane from landfills and converting sugars in agricultural products into ethanol. There’s a lot of research and development being done to help make it even more viable.

That’s why the Alberta government introduced the $60-million Bioenergy Producer Program. By providing 31 bioenergy companies with short-term and production-based grants — meaning that money is awarded based on the energy output — the provincial government hopes to give an additional boost to the burgeoning field.

In total, the grants are expected to reduce provincial emissions by 1.5 megatonnes and create 500 jobs.

8) Non-Profit Energy Efficiency Transition Program ($1 Million)

This one’s extremely straight-forward. Many nonprofits in Alberta are operating with razor-thin margins already, but could help cut greenhouse gases and electricity and heating costs by implementing energy efficiency measures.

The first step is a simple audit, helping organizations figure out where the biggest savings are, after which they can collaborate with the newly formed Energy Efficiency Alberta office to patch the figurative holes. The Alberta government directed $1 million to this task. The program quickly reached “full subscription,” meaning that future applications are closed for now.

9) School Rooftop Solar Program ($9 Million)

Schools often have sizable roofs. They also consume a significant amount of electricity every day with enough lighting, heat and air conditioning to create comfortable learning conditions for hundreds of students.

Combine those two facts and you’ve got yourself a fantastic opportunity for installing solar panels.

In October 2016, the Alberta government committed $9 million to the task of installing solar panels on 36 schools around the province. At the time, CBC reported that the idea was actually generated by students themselves, who submitted it to the government via a public feedback period for the climate change plan.

10) Accelerated Coal Phase-Out ($1.1 Billion)

Next to the household rebates, this is the second priciest item on the list of things the Alberta government has funded with its carbon levy revenue, costing $97 million per year until 2030 (totalling $1.1 billion).

Here’s the deal: 12 of the 18 coal-fired power plants in Alberta would have been shuttered by 2030 under former prime minister Stephen Harper’s federal regulations. That left six coal plants operating for many years afterwards, with one potentially spewing out massive amounts of carbon dioxide, sulphur dioxide, fine particulate matter and mercury until 2061.

Coal is one of the worst-polluting forms of energy on the planet, so the Alberta government introduced new rules requiring all coal-fired power plants to shut down by 2030. Predictably, the owners of the half-dozen facilities weren’t pleased, contending they deserved compensation.

A 2015 Pembina Institute report concluded this action was by no means legally necessary, nor would it result in an unfair economic burden on the companies.

But like it or not, the Alberta government decided to hand over $1.1 billion to the three companies (TransAlta, Capital Power and ATCO) to “provide investor confidence.” All that revenue will come from the levy on large industrial emitters, as opposed to the levy administered on regular Albertans.

The good news is 10 megatonnes of annual emissions will be permanently cut, Alberta’s air will be cleaner and the province is one step closer to a building an electricity system for the 21st century.

So What’s Next?

Those are the highlights for now, but Energy Efficiency Alberta will review its programs and develop new programming as needed, meaning there may be new programs next year.

We will also likely see a significant chunk of transit funding directed to Edmonton as well: after all, while it’s certainly not legislated, it’s an unwritten rule of sorts that Calgary can’t get funding without Edmonton also getting a similar dollar amount.

There’s plenty more to be done in Alberta on the climate front, particularly around oilsands emissions — but it’s difficult to dispute the incredible progress that the Alberta NDP has made in a few short years on the climate file. The architecture has been laid for many more years of expanded success.

That is, of course, assuming the newly formed conservative mega-party doesn’t win the 2019 provincial election.

Image: Premier Rachel Notley and Calgary Mayor Naheed Nenshi discuss provincial funding for Calgary's Green Line LRT. Photo: Government of Alberta via Flickr

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