Report warns Alberta risks losing investment if it fails to reach emissions reduction goals

Alberta needs a robust, credible plan on climate and energy if it is to remain competitive and attract investment in a world where more companies are setting net-zero targets and competing jurisdictions are increasingly committing to emissions-reduction goals, according to a new report from the Pembina Institute.

The report is titled Alberta’s Roadmap to the New Energy Economy. It was prepared by the Calgary-based think tank to try kick-starting public conversations about climate and energy leadership in the run-up to the May provincial election. But it doesn’t stop with energy, making 20 recommendations across oil and gas, electricity, transport, buildings and conservation.

On the energy side, those include further strengthening Alberta’s industrial carbon-pricing system, implementing a strengthened provincial cap on oil and gas emissions, advancing the hydrogen strategy, addressing methane emissions and taking action on oil and gas liabilities.

The report also recommends that the province modernize, decarbonize and upgrade its electricity grid, and help all Albertans benefit from clean, reliable and affordable transportation.

The world has changed a lot since the 2019 Alberta election, Simon Dyer, deputy executive director of the Pembina Institute, said in an interview.

Between the province’s surplus, its track record on energy-sector innovation and its swath of leading experts on low-carbon energy production, “Alberta has the perfect conditions to meet emissions reduction commitments and create a clean-energy plan,” he said.

According to November, 2022, polling data by Janet Brown Opinion Research cited in the report, a majority of Albertans think more should be done to address climate change, and that the transition away from oil and gas will be beneficial in the long run.

“Albertans are ready to lead on this. Albertans are not scared of diversification, they recognize that the world is changing. And oil and gas is important, but I think Albertans are in many ways ahead of our leaders in terms of actually acknowledging that clearly a change is taking place,” Mr. Dyer said.

But without a sustained and co-ordinated decarbonization strategy, Alberta will remain an outlier and risk being an investment has-been.

“Investors are looking for consistent, stable policies, and a recognition that Alberta understands the importance of action on climate change and takes it seriously,” Mr. Dyer said.

“Until Alberta joins the mainstream of all these competing jurisdictions that are committed to reducing emissions … I think we are going to be disadvantaged. And it has the potential to undermine prospects for private-sector investments.”

Alberta Premier Danielle Smith said last week in a letter to Prime Minister Justin Trudeau that the province would soon release an emissions reduction and energy development plan, as the province grapples with how to preserve its oil and gas industry in the face of increasing pressure to reduce the sector’s environmental footprint.

Her government hasn’t yet provided further details of what might be in that plan, or when it will be released, but it will likely take some guidance from a new Premier’s Advisory Council on Alberta’s Energy Future. The five-member panel, announced last week, is charged with developing a long-term vision and recommended steps for the province’s energy future. Its report is due June 30.

The International Energy Agency estimates that, worldwide, 14 million new energy jobs and 16 million new jobs in energy efficiency will be created between now and 2050.

To take advantage of these opportunities, the Pembina report says Alberta must “be willing to confront the realities of the global shift toward low-carbon energy sources, and take steps to adapt and futureproof its economy and work force.”

“Now more than ever before, companies are looking for opportunities to invest in climate solutions, and for jurisdictions where they can operate while meeting their own climate goals. Choosing instead to remain out of step with the global trend toward low-emission economies would leave Alberta at a significant disadvantage in the years ahead.”

Alberta is doing some things very well already, Mr. Dyer said, but it’s not seizing all the opportunities available to it, because it doesn’t have a coherent climate and energy strategy. “There’s opportunity for significant improvements.”