Feds announce cash for carbon-capture research

Speaking at the University of Calgary, Natural Resources Minister Gary Lunn invited proposals from industry for research projects under two new funds announced in the Harper government's March budget.

"Our government is ensuring that Canada is at the leading edge of clean technologies to reduce emissions and adapt to environmental change," he said as university officials looked on.

The first fund is a $125-million initiative to advance new carbon capture and storage (CCS) technology. The second is a $15-million kitty to develop new ways to reduce the environmental impacts of oilsands production, such as tailings ponds.

Last week the university announced the largest research project in Canadian history to study ways to sequester carbon dioxide from coal-fired power plants at Wabamun west of Edmonton, using money from government sources.

"This federal support will enable us to advance carbon capture and storage solutions that help Alberta," says Dr. David Keith who heads the university's Canada research chair in energy and the environment and will lead the groundbreaking study.

Keith previously served on the United Nations' climate change committee, which won a Nobel Prize for its work.

"Implementing CCS is one of the best options we have for achieving large cuts in emissions within reasonable costs and time frames," he said.

Lunn also made a $5-million grant to the university Institute for Sustainable Energy, Environment and Economy to help the university conduct the research.

But critics have complained the federal initiatives don't go far enough to combat the emissions of gases blamed for climate change. In February a federal-provincial task force suggested governments would need to spend about $2 billion to adequately address climate change.

On Thursday the British Columbia government introduced legislation to limit industrial pollution with a so-called "cap and trade" system. Under the plan the government will set limits or "caps" on big polluters and allow them to buy credits or offsets on the open market if they exceed that limit. The province was also the first to implement a carbon tax on consumers.

"The potential to reduce emissions using a cap and trade system is huge, but only if the system is designed well. That means setting strong caps and auctioning pollution permits," says Matt Horne of the Pembina Institute, an environmental watchdog group.

While acknowledging the need for more co-ordination on climate change efforts, Lunn defended his government's policies that will require new oilsands plants to implement carbon capture after 2012.

"These are not targets, they are mandatory reductions," he said.

But Lunn was also cool to the idea of slowing down fossil fuels development - such as oilsands and clean coal - while sorting out environmental issues, calling it the "equivalent of hitting the economic off-switch."

"The oilsands are one of this country's most valuable resources," he said. "But we must reduce the environmental impacts."