Moving the Coal-Posts

In broad terms, the design of the federal backstop mirrors the carbon-pricing system put in place in Alberta under the Climate Change Leadership Plan and the associated Carbon Competitiveness Incentive Regulation (CCIR), which provides Albrta’s framework for output-based pricing of GHGs from large emitters (see overview in Box 1). [...] Figure 1 shows the annual benchmark emission intensity for coal and natural gas generation under the proposed federal OBPS, as well as the uniform benchmark applicable to all electricity under the Alberta CCIR. [...] The differences in the composition of generation between provinces result in varying amounts of GHG emissions relative to the power generated in each province – the so-called GHG emission intensity for electricity, typically measured in tonnes of CO2 equivalent per MWh of power. [...] Figure 4 shows the average GHG emission intensity for power generation by coal and natural gas facilities in Alberta, Saskatchewan, New Brunswick and Nova Scotia relative to the 2019 benchmarks for coal and natural gas power generation. [...] The average carbon cost facing a given power facility will therefore be proportional to the difference between the facility’s GHG emission intensity and the benchmark emission intensity.