Transcript Carbon Connections

Linkages Workshop
November 14/15 2007
Outline
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•
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Alberta context
Regulatory framework
Compliance options
Carbon connections
Provincial Economy
• Fossil-fuel Value-Add Focused
– Resource extraction, upgrading and transport
– Oil sands growing as a major source of secure energy
– Driver of economic and emissions growth (oil sands,
upgrading)
• Thermal-based electricity
– Coal at 60% generation
– Growing wind generation (400% since 2000)
• Disbursed population
– Limited but growing concentration in a few urban areas
• Transportation accounts for 15% of total greenhouse
gas emissions
• 100 large point source facilities account for about
50% of total emissions
• Ideal geology for carbon sequestration
Alberta’s Emissions
(Million Tonnes of CO2 Equivalent)
Business As Usual Projections
305 MT
(average estimate)
300
2004 Emissions:
235 MT
250
200
1990 Emissions:
168 MT
150
100
Share of Emissions Associated with Energy Exports
50
20
20
18
20
16
20
14
20
12
20
10
20
08
20
06
20
04
20
02
20
00
20
98
19
96
19
94
19
92
19
19
90
0
Alberta Approach
• Long term issue
– Need to start with practical, achievable objectives
• Policy certainty for industry
– Large investments being made now – expensive to retrofit,
investment is for 40 years+
• Implementation of new technology will be a big part of
the long-term solution.
– Linked to our unique role as North America’s energy supplier
• Market instruments are needed to bridge the gap
between current emissions and long-term solutions.
• Consumers must be part of the solution
• Requires strategic and focused investment in
transformational changes (technology, behavioral,
etc.)
Alberta Mitigation Options
y
Energ
n
a
e
l
C
inable
Susta
Carbon capture & storage
Con
se
rvati
on &
e
nerg
y
effic
ienc
y
2010: 20MT
Send
Price
reduction from what
Signal
would
have been
2020: 50MT reduction from
Trading
Mechanisms
what would have been;
to Bridge
stabilize
emissions
2050: 200MT reduction from
Technology
what would have been;
14%Application
below 2005 levels
Specified Gas Emitters Regulation
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Under the Climate Change and Emissions
Management Act passed in 2003
Applies to all facilities in Alberta that release over
100,000 tonnes of CO2e
– Facilities have been reporting since 2003
Reduction targets off of baseline
– Emissions/production=baseline intensity
– 12% reduction off of baseline (adjusted targets for
new facilities)
For facilities that are not increasing production
(majority) – intensity target = absolute
Emphasis is on the price signal
Options to Achieve Targets
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Emission Performance Credits
– These are credits for better than target performance
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Fund Credits
– Invest in the Climate Change and Emissions Management
Fund at $15/tonne – funds used to develop or invest in
Alberta based technologies, programs, and other priority
areas
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Emission Offsets
– Action (project) must be taken in Alberta on or after January
1, 2002
– Not otherwise required by law
– Must be verified by 3rd party
The Carbon Market
• Total potential carbon demand is about 10-12 million tonnes
annually
• Focus of the system is on compliance – carbon as a commodity
secondary
– Third party verification not government issuance of credits
– Government to audit at back-end
• Performance credits based on verified compliance reports
• Offset Credits created based on verification of emission
reductions using government approved protocols
– 15 approved thus far
• Deals being done through bilateral contracts / over the counter
• Registry being finalized for posting of key project information
• Growing interest in carbon exchanges
Carbon Connections
• Overarching framework less critical to linkages than the ‘carbon
foundation’
• Framework outlines how a tonne fits to meet regulatory
objectives
• Technical level is where the tonne is created
– For both ex-ante and ex-poste
• Need common weights and measures at the foundational level
– Industry reporting
– Offset protocols
– Verification / Assurance
• Linkages should be tied to the policy context
– Will best inform how systems can bridge
• A coherent international market will evolve, not simply occur
• There is a paradigm shift in moving from exploring to
implementing