The Canadian province of Alberta, home to the country’s controversial oil sands, said on Sunday it will implement an economy-wide tax on carbon emissions in 2017, addressing long-standing criticism it is not doing enough to combat climate change.
The provincial government estimated the plan, including a pledge to phase out pollution from coal-fired electricity generation by 2030 and a limit on emissions from the province’s oil sands industry, would generate C$3 billion ($2.25 billion) in annual revenue.
Backed by prominent representatives from industry and the environmental movement, Premier Rachel Notley said the province was trying to do the right thing for the future.
Notley’s left-leaning New Democratic Party took power earlier this year, ending 44 years of Conservative rule.
“It will help us access new markets for our energy products, and diversify our economy with renewable energy and energy efficiency technology,” Notley said in Edmonton. “Alberta is showing leadership on one of the world’s biggest problems.”
Alberta has the world’s third largest crude reserves, but its oil sands industry is also Canada’s fastest growing source of greenhouse gas emissions.
That status has prompted fierce opposition from environmental groups to proposed pipelines that would allow the industry to access new markets, including the recently rejected Keystone XL pipeline, proposed by TransCanada Corp.
U.S. President Barack Obama rejected that project on Nov. 6, explaining that “shipping dirtier crude oil” into the United States would not enhance the country’s energy security.
Alberta‘s energy sector has also been hammered with thousands of layoffs in recent months due to slumping global oil prices.
The government said all oil sands operators would still be allowed to increase their combined annual carbon pollution from about 70 million tons to a maximum of 100 million tons per year under proposed legislation.
It said this plan was endorsed by several major oil companies, including Suncor Energy, Cenovus, Canadian Natural Resources Ltd and the Canadian division of Royal Dutch Shell Plc.
Environmental groups, including the Pembina Institute, Forest Ethics and Environmental Defense Canada, also endorsed the plan, the province said.
The province estimated its new plan would cost the average household about C$320 per year in 2017 and C$470 per year in 2018. ($1 = 1.3328 Canadian dollars)
On Monday, Canadian Prime Minister Justin Trudeau called Alberta’s plan “an historic moment, a strong positive step in the right direction.”
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