The much-anticipated unveiling of the draft Clean Electricity Regulations (CER) in Canada last week has ignited debate about the equitable distribution of carbon reduction responsibilities across the country.
Canada's electricity production currently boasts an impressive low carbon intensity, with almost 85% of its energy derived from carbon-free sources. However, this level of carbon intensity is not uniformly distributed across the country. The majority of carbon emissions stemming from electricity generation are concentrated in Nova Scotia, New Brunswick, Alberta, and Saskatchewan. Despite the diligent efforts in these regions to reduce their carbon intensity, addressing the final 15% reduction is a huge challenge and will be costly.
At the heart of the debate lies a question: Should residents of provinces that have higher carbon intensity bear the entire carbon reduction burden for Canada, or should the responsibility be collectively shared across the country such that provinces like Quebec, Manitoba, and British Columbia which are endowed with abundant hydro power, also bear the cost? If so, how will that work? There are Federal support mechanisms on the table, but no details as yet.
The CER is intended to be implemented with a small measure of flexibility across the country. But there are elements of the CER that are more applicable in one region than another. For example, there is a proposed provision that pertains to gas-fired power generation coupled with carbon capture and storage. While potentially a feasible (albeit still expensive) solution in Alberta and Saskatchewan, it is not practical in the maritime provinces due to the geological limitations.
This raises a serious concern for me as a resident of Nova Scotia: how can we meet the ambitious CER targets without making electricity unaffordable here? There are no details on cost sharing in the CER but the Federal government has been clear that any province seeking support will need to adopt Federal targets and policies. Alberta has already rejected that approach.
I am inclined to advocate for a Canada-wide allocation of decarbonization costs. Admittedly, there are some constitutional issues with that suggestion given that electricity generation is within the purview of provinces. But if you look at the problem holistically, when the last 15% of decarbonization is the hardest and the costliest, why should the burden be carried by the provinces who are least able to attain it?