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Alison Redford's departure quieted a political crisis for the Alberta government, but there are still stacks of unfinished work, perhaps none bigger or thornier than tackling rising greenhouse gas emissions.

With no permanent successor as premier due for at least five months, it's a stretch to expect more clarity on carbon, though. The timing isn't good.

There's a whole lot riding on climate policy in Alberta, from oil patch profitability to relations with Washington as it considers a contentious pipeline, to the chances of re-election for a party that's been in power since Three Dog Night topped the charts with Joy To The World in 1971.

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With oil sands output steaming ahead, the province has been agonizing over its next moves and how they might mesh with a federal plan – all while getting pilloried by environmental groups for dragging its feet.

Now, the battle for the leadership of the Progressive Conservatives is a distraction at best and a hindrance at worst, especially with U.S. President Barack Obama vetting TransCanada Corp.'s Keystone XL pipeline through the lens of the impact of carbon emissions from Canadian oil operations. He could make his decision in the coming months.

A new United Nations report warning of growing risks to health, economies and food sources from climate change has only intensified the spotlight on energy production and consumption.

In her frequent travels to Washington to sell Keystone, Ms. Redford held up Alberta's carbon levy as Exhibit A on how the province was in the forefront of dealing with the problem. Since 2007, it has had a $15-per-tonne penalty on emissions above target levels for large industrial operations, with the options of buying offsets or paying into a technology fund.

The program, known as the Specified Gas Emitters Regulation, is due to expire on Sept. 1, which, inconveniently, is five days before the PCs' first leadership vote.

The current rules can be extended, and it's unlikely that any of the hopefuls – and the field is still shaping up – would want to rock the boat too much by championing much tougher new carbon policies.

The government has wrestled with this for a while as it became clear that its current policies would not be tough enough to meet its greenhouse gas emission targets.

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One year ago, then-environment minister Diana McQueen sent shivers through the energy sector by musing about increasing emission reductions to 40 per cent per unit of production from 12 per cent, and boosting the penalty to $40 a tonne. That has not been done.

In January, her successor, Robin Campbell, talked about other options, including lowering the overall emission threshold in the province to bring more facilities under the rules, setting out different targets for different industries and allowing companies to buy offsets in other jurisdictions.

He said the trick is to get maximum emission reductions without quashing economic growth. Of course, the oil patch has argued often that the Alberta government should not be tougher on carbon than the United States because that would make it less competitive.

There's another wrinkle: Ottawa. Prime Minister Stephen Harper's Tories have made a hobby of delaying long-promised new carbon rules for oil and gas. Mr. Harper has said he wants to harmonize policies with the United States.

The Harper government has also said it is working with the provinces on it. Alberta says it is looking for the feds to take the lead so everyone can work together.

Also on the environment file, the government had been working on a strategy for renewable energy, but its fate is unknown after the minister who was heading it up, Donna Kennedy-Glans, quit the party in the days before Ms. Redford's resignation.

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None of this dithering is giving anyone any joy.

The oil patch and its investors could do with some answers on this issue, which has simmered for years with an unknown cost. CEOs these days like to talk about social licence, an imprecise concept at best but one that could be bolstered to their benefit with some carbon clarity.

The problem in Alberta is that politics will trump policy for the next several months with the licence coming up for renewal.

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About the Author
Mergers and Acquisitions Reporter

Jeffrey Jones is a veteran journalist specializing in mergers, acquisitions and private equity for The Globe and Mail’s Report on Business. Before joining The Globe and Mail in 2013, he was a senior reporter for Reuters, writing news, features and analysis on energy deals, pipelines, politics and general topics. More

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