How to fix Alberta’s broken carbon market

The author contends that Alberta's TIER carbon market is currently broken, with credit prices hovering below $20 a tonne despite a headline price of $95. To align with the Alberta-Canada Memorandum of Understanding (MOU) goal of a $130 per tonne minimum price by 2030, the document proposes reducing the 48 million surplus credits through a revenue-recycling procurement fund and tightening performance standards to limit the supply of new credits and offsets.

• The Technology Innovation and Emissions Reduction (TIER) carbon market is experiencing a price crash, with credits trading below $20 a tonne, significantly lower than the headline price of $95 a tonne. This is attributed to design choices that created a supply of credits exceeding demand, as well as political uncertainty.
• The Alberta-Canada Memorandum of Understanding (MOU) aims to establish a minimum effective credit price of $130 a tonne by 2030 to provide long-term certainty and transparency for industrial investment, including projects like the Pathways carbon capture and storage (CCS) project.
• To fix the market, Alberta needs to address a surplus of 48 million credits, representing approximately two and a half years of compliance. The author suggests removing at least 10 million tonnes of these surplus credits by 2030.
• The document proposes a revenue-recycling procurement fund to buy and retire surplus credits, using industry payments currently directed to government operations and technology funding under ERA, potentially supplemented by limited government funding in early years.
• Additional necessary reforms include tightening performance standards for industry and limiting banked credits and offsets to reduce the supply of credits and prevent the dilution of the price signal.

APA

Canadian Climate Institute (2025). How to fix Alberta’s broken carbon market. https://climateinstitute.ca/how-to-fix-albertas-broken-carbon-market/

Chicago

Canadian Climate Institute. How to fix Alberta’s broken carbon market. 2025. https://climateinstitute.ca/how-to-fix-albertas-broken-carbon-market/.

Wikipedia

{{cite press release |author=Canadian Climate Institute |title=How to fix Alberta’s broken carbon market |date=10 December 2025 |url=https://climateinstitute.ca/how-to-fix-albertas-broken-carbon-market/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{canadianclimateinstitute2025how, author = {{Canadian Climate Institute}}, title = {{How to fix Alberta’s broken carbon market}}, publisher = {Canadian Climate Institute}, year = {2025}, month = dec, url = {https://climateinstitute.ca/how-to-fix-albertas-broken-carbon-market/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }