The days of infinite growth in Alberta’s oilsands are over with the Alberta government’s blockbuster climate change announcement on Sunday, which attracted broad support from industry and civil society.

“This is the day that we start to mobilize capital and resources to create green jobs, green energy, green infrastructure and a strong, environmentally responsible, sustainable and visionary Alberta energy industry with a great future,” Premier Rachel Notley said. “This is the day we stop denying there is an issue, and this is the day we do our part.”

Notley and Environment & Parks Minister Shannon Phillips released a 97-page climate change policy plan, which includes five key pillars.

1) Carbon will be priced economy-wide at $30/tonne by 2018.

2) Coal-fired power plants will be phased out by 2030.

3) Oilsands emissions will be capped at 100 megatonnes (Mt) per year (recent Environment Canada figures predicted a 2020 output of 103 Mt from the sector), which amounts to allowing current construction to go ahead, but that’s it. That means to expand production beyond current projects, per barrel emissions will need to be reduced.

4) Methane emissions from oil and gas operations will be cut by 45 per cent in 2025.

5) 30 per cent of all electricity will be generated by renewables by 2030.

It is a staggeringly significant proposal, one that far surpasses anything the former Progressive Conservative government imagined in the course of its 43-year reign. The announcement — delivered at Edmonton’s Telus World of Science — was benefitted by appearances from CEOs of Suncor, Canadian Natural Resource Ltd. (CNRL), Shell and Cenovus, something far-right activist Ezra Levant dismissed by alleging the massive energy companies “don't represent the industry.”

Environmental groups such as the Pembina Institute and Clean Energy Canada were also on stage. Getting all of those players in support of one climate strategy is a huge testament to the leadership of University of Alberta energy economist Andrew Leach, who chaired the climate change panel.

Climate Change Policy Plan Garners Broad Support

With the exception of the rabidly conservative Wildrose Party and former deputy premier Thomas Lukaszuk, it seemed every serious player in politics and industry celebrated the announcement. The NDP-affiliated Broadbent Institute, headquartered in Toronto, concluded: “On a public policy Richter scale, Alberta’s new Climate Leadership Plan is an 11.”

Shell Canada announced that “these measures provide predictability and certainty and will help ensure that producers can responsibly develop and grow this significant Canadian resource while also addressing global concerns about climate change.”

Prime Minister Justin Trudeau congratulated Notley in a tweet now favourited over 1,300 times as “a very positive step in the fight against climate change.”  Political blogger Dave Cournoyer accurately dubbed it a “pigs fly” situation.

All of this means a whole lot given the impending Paris Climate Change Conference (COP 21).

Canada ranks 15th out of 17th countries for greenhouse gas emissions according to the Conference Board of Canada, with Alberta contributing 36 per cent of national emissions in 2013 despite only accounting for 11 per cent of the country’s population.

The expected spike in oilsands expansion was widely expected to nullify all other sources of emissions reductions in the Canada. The fact that Alberta, and by extension Canada, is now going into COP 21 with a detailed plan to address the province’s largest source of emissions – oilsands development and coal-fired power plants – speaks volumes about the desire to be taken seriously on the world stage.

Climate Plan May Increase Social Licence for Oilsands Operations

Another component that ostensibly drove oil execs to hop on the green bandwagon was the need to accrue “social licence,” or the support required to build pipelines to export its products. The veto of TransCanada’s Keystone XL pipeline represents what happens when such social licence isn’t secured.

By addressing runaway emissions, Alberta-based companies might actually stand a chance to build infrastructure like the Energy East pipeline, which would transport 1.1 million barrels of diluted bitumen from Alberta to Quebec and New Brunswick every day.

“The province’s climate strategy may allow our sector to invest more aggressively in technologies to further reduce per barrel emissions in our sector and do our part to tackle climate change,” said Tim McMillan, Canadian Association of Petroleum Producers’ president and chief executive officer, in a statement.

“We encourage the province to follow a balanced approach, recognizing that our sector can only become a global supplier of responsibly produced oil and natural gas if we are competitive on the world stage.”

The fight over pipelines is unlikely to dissipate. While Sunday’s announcement was a giant step in the right direction, it’s still not enough to avoid catastrophic global warming, according to a statement from Greenpeace.

“These policies are important first steps, but much bigger emission reductions will be needed for Alberta to do its part to keep global warming below 2 degrees Celsius,” Alberta climate and energy campaigner Mike Hudema said.

Hudema also noted that the province still has no short or long-term emission reduction targets.

“Targets give an important signal to business, let the world know where Alberta is headed, and help ensure that direction leads to the reductions that science and equity demand,” he said.

The Pembina Institute has historically supported a higher carbon tax than what was proposed on Sunday – with $40/tonne in 2016, $50/tonne in 2017 and $60/tonne in 2018 — but the plan is an indisputably major upgrade from the Specified Gas Emitters Regulation (SGER), which taxed Alberta’s largest emitters (103 at last count) at the equivalent of $1.80/tonne.

George Hoberg, professor in the forest department at the University of British Columbia, notes there’s still plenty of work to be done but that: “Today is a day for celebration. Alberta has bent its carbon emissions curve, and provided a lever to Canada to show real climate leadership.”

Ultimately, the future of Canada’s environmental reputation may rely on the work that Trudeau and Environment and Climate Change Minister Catherine McKenna complete during and after the Paris conference. But Sunday’s announcement out of Alberta sets quite the standard.

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Blame Canada is a four part series revealing how Canada has become a wealthy, fossil-fuelled energy superpower and an international climate pariah. For Part 1, The Country has become a Petrostate, click here. For Part 2, Canada's Plan to Get Rich by Trashing the Climate, click here. For Part 4, What is Happening to Canada?, click here.

Few are aware Canada's GDP shot up from an average of $600 billion per year in the 1990s to more than $1.7 trillion in 2012. This near tripling of the GDP is largely due to fossil fuel investments and exports. However not many Canadians are three times wealthier. For one thing GDP is only a measure economic activity. The other reason is that little of this new wealth stayed in Canada. And what did stay went to a small percentage of the population, worsening the gap between rich and poor.

One of the hallmarks of a “petro-state” is that while a country's energy industry generates fantastic amounts of money, the bulk of its citizens remain poor. Nigeria is a good example. Canada's poverty rates have skyrocketed in step with the growth of the energy sector. One Canadian child in seven now lives in poverty, according to the Conference Board of Canada, the country's foremost independent research organization.

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Income inequality increased faster than the US, with the rich getting richer and poor and middle class losing grounds over the past 15 to 20 years, the Conference Board also reported January 2013.

"Most of Canada's increase in wealth went to the big shareholders in the resource industries,” says Daniel Drache, a political scientist at Toronto's York University. “It mainly went to the elites."

Drache argues that Canada has moved into a type of “reckless resource capitalism,” sacrificing innovation and creativity. Resource extraction industries like logging, mining or fossil fuel production create relatively few jobs, and most of them are short-term positions. Almost all of the equipment used in Canada for resource extraction is made by other countries.

Drache says Canada's economy has completely reversed from its high-tech days of the 1980s and 1990s and has returned to its colonial roots as a "resource-based economy selling rocks [minerals] and logs" — and now oil and gas.

The Petro-state Path to Poverty

The extraordinary wealth in one sector has been a disaster for the overall Canadian economy, according to another recent study. Up to 45 percent of job losses in Canada's manufacturing sector can be attributed to what economists call "Dutch Disease," wrote authors from Canada and Europe in a peer-reviewed paper published November 2012 in the journal Resource and Energy Economics.

Dutch Disease refers to the many examples where an increase in exploitation of natural resources coincides with a decline in the manufacturing sector. It was first documented in the Netherlands during its North Sea oil boom in the 1960s.

Canada's energy wealth has also exacerbated income inequality by spurring the cost of goods and services and making Canadian exports more expensive. Ten years ago, the Canadian dollar was worth about 65 cents on the US dollar. In recent years, the Canadian dollar has been on par with the US dollar, or even exceeded it in value.

The study in Resource and Energy Economics found that the "Canadian currency has been driven up by the prices of commodities." As the Canadian currency gained strength, more than a half-million manufacturing jobs have been lost since 2000. In 2011 Canada lost industrial plants at twice the pace of the United States.

"This illustrates a negative side-effect of the oil-resource richness in Alberta," the study’s authors concluded.

That is a conclusion the Harper government does not want to hear even though the study was commissioned in 2008 by a government department. Applying the term "Dutch Disease" to Canada has Harper officials saying it is an insult to the hard-working employees in the resources sector.

There's not many to insult. Relatively few Canadians work in the resources sector. It's all big machines and big money. The Alberta tar sands are the world's largest industrial project with investments in the hundreds of billions of dollars and only 20,000 people worked there in 2011. For all its rapid growth Canada's oil and gas sector created only about 16,500 new jobs between 2000 to 2011, the same period in which 520,000 manufacturing jobs were lost.

Canada's GDP has nearly tripled, its energy and resources sectors have never been bigger and yet governments are running huge and growing deficits. Meanwhile the federal and Alberta governments spend millions of dollars facilitating faster growth of the energy industry so it can rip more publicly-owned, irreplaceable oil, gas and coal out the ground. For whose benefit, Canadians ought to be asking.

Image Credit: Kris Krug via flickr.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.