'Made in Alberta' climate plan in the works: new Premier Danielle Smith

Alberta Premier Danielle Smith said the new government will be developing a "fully made in Alberta solution" to carbon tax policy.

She made the comments during her first press conference as premier on Tuesday.

"We can do it our own way," said Smith.

Economists say there's a lot of merit to provincial governments designing their own use of revenue, and allocating funds to meet different priorities.

"If the new government wants, they can take that carbon tax back, still charge it in the same amounts on fuel and home heating, but then the province can choose what to do with the revenues," said Trevor Tombe, economics professor at the University of Calgary.

Once the carbon tax is fully phased in, he estimates revenues from a provincial carbon tax could reach $6 billion by 2030.

"Having another source of revenue might provide some space to maybe ease our dependence on natural resources," said Tombe.

Alberta is currently under a federal carbon tax policy framework pertaining to household energy consumption, while a provincial framework places a price on carbon emissions made by Alberta's energy sector (technology innovation and emission reduction or TIER regulation).

The NDP government under Rachel Notley had introduced a provincial carbon tax that was removed shortly after former premier Jason Kenney took office.

The decision made way for the federal government to impose its own version in Alberta, after failed court challenges mounted by the Kenney government.

The federal plan rebates Alberta households with quarterly sums (as of July) and amounts differ depending on household size and for rural residents.

Instead of rebates, Tombe said a new provincial government could potentially use carbon tax revenues toward healthcare spending, eliminating the provincial gas tax, or to adjust income tax rates.

SUSTAINABLE INCENTIVES

Sara Hastings-Simon, director of the sustainable energy development graduate program at the University of Calgary, said a new climate plan could include incentives to reduce demand on the energy system.

"So that means less of a need for buildout of new distribution or transmission infrastructure. That could help save individuals and companies money," she said.

Hastings-Simon said steps like switching to an electric vehicle or improving home insulation are ways that demand can be reduced.

"(But) the challenge though it's that there are up front costs, and those costs can be significant," she said, adding that grants or low interest loans could be made available for the policies that support households.

The next climate action incentive payment (CAIP) is due in Albertan's bank accounts in a matter of days.

With the next federal carbon tax increase is scheduled for April 1, Tombe said he suspects the details of a new climate plan will be revealed in the spring budget likely to be announced in the weeks prior.