November 22, 2015 / 9:55 PM / 2 years ago

UPDATE 1-Canada's Alberta to introduce economy-wide carbon tax in 2017

(Adds comment from industry and environmental groups)

By Mike De Souza

CALGARY, Nov 22 (Reuters) - 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 will bring her plan into a meeting on Monday of Canadian premiers with Prime Minister Justin Trudeau, to prepare Canada's national strategy at the upcoming Paris climate change summit.

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.

Alberta's energy sector has also been hammered with thousands of layoffs in recent months due to slumping global oil prices.

Several major oil companies, including Suncor Energy Inc , Cenovus Energy Inc, Canadian Natural Resources Ltd and the Canadian division of Royal Dutch Shell Plc endorsed the government proposal to set a cap that would still allow overall oil sands emissions to grow by about 40 per cent.

"This plan recognizes the need for balance between the environment and the economy - one that should provide greater flexibility for the industry and the province on a go-forward basis," said Murray Edwards, chair of Canadian Natural.

Environmental groups, including the Pembina Institute, Forest Ethics and Environmental Defence Canada, also endorsed the plan.

Greenpeace Canada described the plan as a "historic first step" to slowing growth of pollution, but said more needed to be done by all jurisdictions to prevent dangerous changes to the climate. ($1 = 1.3328 Canadian dollars)

Editing by Jonathan Oatis

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