Too TIER-ed? Alberta’s Proposed Re-design of Carbon Pricing for Large Emitters /

However, under the proposed would likely establish $30 per GHG tonne as the TIER, each facility’s target would be 90% of the rate for the TIER fund in 20207 – presumably to facility’s average emissions intensity for the last maintain the marginal carbon price for large emitters three years, and Figure 1 shows the implications in line with the 2020 carbon price under the federal for imposing such a [...] Impact of TIER on Average Carbon Costs Facing Figure 2 illustrates the implications for the Facilities estimated average carbon costs of the given in situ To see the impact on the applicable emission intensity facility under CCIR, the federal OBPS and the benchmarks and the average carbon costs, consider proposed TIER (average carbon costs are calculated the example of pricing for GHG emissions fr [...] As long as the facility faces the same benchmark Relative to the CCIR or federal OBPS, the TIER after as before the improvement, the operator should would not diminish the marginal incentive from a only consider the before/after difference in emission $30 per tonne carbon price in 2020 for an existing intensity and the marginal carbon price. [...] If the policy program.12 That is, an operator should be willing to aims are to internalize the cost of the externality and 12 Following Appendix A in “Moving the Coal-Posts”: under either the TIER or CCIR, the profit incentive is computed as the GHG price incentive multiplied by output and minus the amortized cost of the new technology – that is:. [...] For example, from Alberta’s electricity sector and the proposal to the CCIR established a benchmark of 55.71 GHG retain a “best gas” product-specific benchmark for tonnes per thousand barrels of bitumen for in situ oil power generation under TIER, it is likely that the sands production.16 Appendix Figure 1 exhibits the deficit of GHG credits from power generation would historical average emission