Implementing the Technology Innovation and Emissions Reduction (TIER) Fund

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“The world is grappling with the tension between our need for the carbon-based energy industry and a consensus that its emissions are directly contributing to climate the change. The NDP plan has proven to be just another “cash cow”, has done little for the environment, and has hurt Alberta’s economy. The United Conservatives are committed to responsible energy development and that includes action to mitigate greenhouse emissions and reduce their contribution to climate change. We will bring in a form of carbon pricing for emitters that will produce better results than the NDP’s failed policies, will reassure investors, and generate real emissions reductions by implementing an improved system for larger emitters.”

The United Conservatives’ Improved System Will:

  • Bring in a new Technology Innovation and Emissions Reductions (TIER) regime for large industrial emitters in Alberta effective January 1, 2020. This will be an improved system to manage emissions from Alberta’s large industries (including oil and gas and electricity generation) which are responsible for about 60% of Alberta’s greenhouse gas emissions.
  • Under this new system, existing facilities with emissions above 100,000 tonnes of carbon dioxide (or equivalent) other than electricity generators, will have to meet an emissions performance target of reducing their emissions intensity by 10% (increasing by 1% per year) compared to their average performance between 2016 and 2018. That can be achieved by either: reducing facility emissions, purchasing credits from facilities that have exceeded their compliance targets, purchasing accredited offsets from emissions reductions occurring elsewhere in the Alberta economy, or paying into the TIER Fund at a rate of $20/tonne.
  • Reduce the compliance price from $30/tonne to $20/tonne.
  • Require large final emitters (LFEs) in the electricity sector to meet a “good-as-best-gas” performance standard, which means that over 60% of coal fired electricity.
  • Implement a TIER Fund which will help companies reduce emissions with cleaner technology.

The first $100 million in revenues and 50% of remaining revenues paid into the TIER Fund will be used for new and cleaner Alberta-based technologies that reduce carbon emissions even further, including new and improved oil sands extraction technology and supporting research and investment in carbon capture, utilization and storage (CCUS). The remaining TIER funds will also support:

  • Reductions in Alberta’s deficit.
  • $20 million of the $30 million annual budget for the energy “war room” that will fight fake news and share the truth about Alberta’s resource sector and energy issues.

In total, TIER will generate estimated TIER Fund revenues of $142.5 million in 2019/20 (and $630 million in total when combined with existing CCIR revenues until December 31, 2019) and $570 million in 2020/21.

The United Conservatives are committed to responsible energy development and a sensible approach to greenhouse gas reductions that will get Albertans back to work.

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Alberta needs a sensible approach to reducing greenhouse gas emissions. However, the NDP’s Carbon Competitiveness Incentive Regulation (CCIR), has become just another “cash cow” for government. According to an internal government analysis the costs associated with the CCIR are estimated to be approximately

$1.3 billion a year and are anticipated to result in “greater employment loss than estimated impacts associated with the coal phase-out.” The CCIR has also introduced significant uncertainty into the marketplace, which has hurt Alberta’s economy.

In 2007, Alberta became the first jurisdiction in North America to bring in a form of carbon pricing for emitters, and the United Conservatives believe that restoring an updated version of this model will produce better results than the CCIR introduced by the NDP.  We can reassure investors while generating real emissions reductions by implementing an improved system for larger emitters.

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