OTTAWA — The federal carbon tax could favour coal-fired power plants over clean sources like wind and solar in its approach to industrial emissions, a new report says, potentially undermining a central aim of the Liberal government’s policy.
Environment Minister Catherine McKenna released a regulatory proposal in December 2018 that provided details on the heavy emitters portion of the carbon tax, including how levies would be applied to electricity generators.
Independent think-tank The C.D. Howe Institute reviewed the proposal and found it would actually give a leg up to higher-intensity emissions like coal and “diminish” investment in renewables, due to a decision to raise a critical threshold on certain producers.
“This is indisputably a carve-out for coal that departs from the principle of an economy-wide carbon price,” said Grant Bishop, who wrote a report on the institute’s findings published Tuesday.
The report could add weight to claims that the federal carbon tax introduced by Prime Minister Justin Trudeau does little to target high-intensity industrial emissions. It could also have an impact on coal-related emissions in Alberta, which still depends heavily on the fuel source to generate power.
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