17 Nov Engaging new regulatory approaches to generate revenue for environmental management: ELC report
Engaging new regulatory approaches to
generate revenue for environmental management: ELC report
Resources are needed to address a broad suite of environmental challenges in Alberta: point source pollution, non-point source pollution and cumulative environmental effects, among others. Environmental spending includes resources for monitoring, assessment, planning, developing and applying regulatory schemes, and enforcement.
With its significant reliance on oil and gas revenues, a commodity with tumultuous pricing, Alberta is no stranger to budgetary turmoil. In addition, environmental spending must compete with numerous other budgetary priorities. So how can revenues be increased and dedicated to address Alberta’s environmental challenges?
In our new publication – Accounting for Nature: Regulatory approaches to filling environmental budget gaps in Alberta– the ELC seeks to address revenue challenges in Alberta related to environmental impact.
Revenues generated can be used across the spectrum of environmental governance: monitoring, assessing, planning, administration of regulation, and compliance and enforcement. Some current examples include hunting and angling licence fees going to support the Alberta Conservation Association (ACA), and forestry dues supporting the research and work of the Forestry Resource Improvement Association of Alberta. But there are additional options which could be applied in Alberta.
The report considers whether Alberta’s existing laws have enabled a level of accounting for environmental management. The ELC recommends tying environmental linked revenues with environmental management and environmental outcomes.
The Guide looks at three distinct areas of revenue to support environmental management:
- pollution or environmental impairment fees and levies;
- green investments; and
- linking taxation and citizen based tax initiative with environmental outcomes.
Opportunities to increase the balance of Alberta’s environmental ledgers
There are several opportunities to expand our revenue sources and to link those revenues with environmental outcomes, filling the gaps in Alberta’s environmental ledgers. We have prioritized six approaches from the report for further consideration.
We have highlighted 6 actions below:
- An environmental heritage trust
Alberta’s experience with legacy sites demonstrates that environmental liabilities often outlast the corporations that create them. An environmental heritage fund would help address future risks associated with abandoned and reclaimed oil and gas sites. Where well abandonment failures occur in the future there will need to be resources that can be brought to bear to ensure Albertan’s land and water are protected for future generations. (See the 2015 Alberta Energy Regulator presentation, Understanding and Mitigating Well-Integrity Challenges in a Mature Basin (September 29, 2015) that highlights the percentage of abandoned well sites with well integrity challenges which in turn lead to environmental, property and human health risks.
- Water licence rents
Alberta’s fresh water resources are a boon to the province, providing water to our communities, our economies and our recreational fisheries. Yet there is limited ongoing government planning and management around water quantity and quality issues. There is significant reliance on non-government actors such as watershed planning and advisory councils, and watershed stewardship groups to maintain and restore Alberta’s aquatic systems. How might we expand water monitoring, planning, assessment and regulation to maintain aquatic ecosystem health?
In this area British Columbia has led to the way, by putting in place water rents, with annual revenues projected to bring from $360million to $459 million over the coming years. (Source: Table A5 Material Assumptions – Revenue https://www.bcbudget.gov.bc.ca/2020/pdf/2020_budget_and_fiscal_plan.pdf ).
These financial resources can be earmarked for water and watershed monitoring, planning and restoration purpose, ensuring that Alberta can maintain and restore water quality and better manage and protect habitat for aquatic species at risk.
- Habitat restoration funding
Effective management of habitat disturbance continues to be a major gap in Alberta’s environmental policy. The original promise of regional plans and biodiversity frameworks under the Alberta Land Stewardship Act to address our footprint have not come to fruition. There is a need to pursue habitat relevant standards for land based impacts, as well as the creation of offset systems to enable restoration of impaired habitat. (For a discussion of this, see David Poulton & Eran S. Kaplinsky (eds) The Implementation of Market-Based Conservation Tools Under the Alberta Land Stewardship Act: A Review, October 2022
- Augmenting forestry planning and research
The scope of work Forestry Resource Improvement Association of Alberta (a delegated authority under the Environmental Protection and Enhancement Act that is set up under the Forests Act) undertakes with forestry dues is now somewhat limited to resource improvements not ecological research and understanding. While the organization does administer some work related to species at risk it appears to be funded through general revenue (grants from Alberta Environmental and Parks, as the department was previously known). An augmentation of the mandate of the Association and its research priorities can assist in moving forestry beyond timber to ecosystems based approaches. Recent years have seen the dues increase significantly ($180million according to their most recent annual report) and there is an ongoing need to invest in management of our forestry not only for timber but for ecosystem values (see the ELC’s recent publication for more on Ecosystem-based management of Alberta Forests Managing Forests not Forestry: Law and Policy Recommendations for Ecosystem-based Management of Alberta’s Forests )
- Green investment standards
As investors increasingly seek to put their money into areas that align with their environmental values and goals, challenges around transparency and accountability regarding the “greenness” or impact of a given investment arise. A proposed approach in the EU is to harmonize green investment standards into regulation whereby third party reviewers report on the validity and impact of investments. This creates accountability around bonds and securities that are marketed as “green” (whether issued by governments, crown corporation, or others).
- Municipal environmental levies/taxes
Alberta municipalities have limited opportunities to raise revenues for environmental purposes in their jurisdiction, rather there is reliance on general property tax revenue. By way of example, conservation reserves are enabled under the Municipal Government Act to allow municipalities to become the owners and effectively protect specific environmentally significant lands within the municipality (with compensation going to the landowner). The inclusion of conservation reserves in the legislation without enabling additional revenue sources minimizes its relevance as a conservation tool.
Municipalities in British Columbia, in contrast, have used a slightly broader taxation power to implement conservation services taxes. The Alberta Municipal Government Act should be amended to enable revenue generation for environmental services within the municipality (or a part thereof). These funds might be used for acquisition and/or management of valued natural areas, ecosystem or watershed significant areas, or parks.
By pursuing these priorities in legislative and regulatory approaches to environmental management Albertans may be assured that environmental quality can be maintained and restored for its current citizens, as well as future generations.
You can also watch the recording of our recent webinar on this topic by Jason Unger on November 8.
The Environmental Law Centre thanks the Alberta Law Foundation for its financial support for this project.
ABOUT THE ENVIRONMENTAL LAW CENTRE:
The Environmental Law Centre (ELC) has been seeking strong and effective environmental laws since it was founded in 1982. The ELC is dedicated to providing credible, comprehensive and objective legal information regarding natural resources, energy and environmental law, policy and regulation in Alberta. The ELC’s mission is to advocate for laws that will sustain ecosystems and ensure a healthy environment and to engage citizens in the laws’ creation and enforcement. Our vision is a society where our laws secure an environment that sustains current and future generations and supports ecosystem health.
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