TIER weakens incentives for technology, innovation and emissions reductions | Pembina Institute
CALGARY — JAN GORSKI, analyst at the Pembina Institute, made the following statement in response to Tuesday’s announcement of the new TIER system:
“The government’s new industrial carbon pricing policy, the Technology, Innovation and Emissions Reduction system, is weaker than what is currently in place, and creates uncertainty at a time when we need the exact opposite. Investors are looking for strong and consistent policy that decarbonizes production and drives innovation across all sectors of Alberta’s economy.
“Profound changes are happening in our global energy systems, driven by advances in technology and action on climate. With respect to the oil and gas industry in particular, investors are recognizing uncertainty in long-term oil demand and want government policy that is predictable, stable and helps industry stay competitive in this new and emerging 21st-century economy.
“This new policy is a step backwards, falling halfway between the current Carbon Competitiveness Incentive Regulation (CCIR) and the previous system. Under CCIR, all facilities were treated fairly and subject to a sector-wide emissions standard. All had to maintain emissions below this benchmark, or pay a carbon price on emissions that exceeded it. TIER, on the other hand, relies on facility-specific benchmarks, along with best-in-class benchmarks, to incentivize top performers. With individual benchmarks, TIER will effectively punish progressive companies that have already taken action to reduce emissions, while rewarding those that have not and may have easier, cheaper reduction opportunities. This new system is unfair, less efficient and unnecessarily more complex.
“In addition, Alberta has only committed to a price on emissions of $30 per tonne in 2020, without providing the long-term market signals that the federal system includes. Unless the $10-per-year increase is included in the policy (reaching $50 per tonne in 2022), TIER risks failing to reach equivalency with the federal system.
“We do commend the government for keeping a single emissions benchmark in the electricity sector. This creates a level playing field for all sources of electricity, allowing renewable energy to compete more fairly and ensuring policy consistency and continuity.”
Michelle Bartleman (English/français)
Communications Lead (Edmonton), Pembina Institute
587-588-5744
Kurt Archer
(Communications Lead (Calgary), Pembina Institute
587-585-4522
Jan Gorski
Analyst, Pembina Institute
587-586-5730
About the Pembina Institute
The Pembina Institute is a non-profit think-tank that advocates for strong, effective policies to support Canada’s clean energy transition. We have offices in Vancouver, Calgary, Edmonton, Ottawa and Toronto. Learn more: www.pembina.org