Liberal climate plan looks to guarantee a carbon price, no matter who is in power

The concrete industry is known as one of the hardest sectors to decarbonize because of the extremely high temperatures — between 1,400 and 1,500 C — and the chemical process used to create the product.

There are many ways that concrete facilities can cut down on their emissions, but they all come with a price tag.

Spending that money gets easier to do if a heavy-emitting industry knows it will save in the long run — say, with a rising carbon tax in Canada that would make it costly not to change. The problem is there's always the risk that a change in government or a shift in political attitude can result in the price of carbon being reduced or wiped out altogether.

The uncertainty is why some companies are hesitant to spend hundreds of million and sometimes billions of dollars to slash greenhouse gases.

The federal government is now moving toward providing a guarantee of sorts, for firms that want to see the carbon tax climb to the levels the government has forecast. But with few specifics, it's still unclear how well the approach would survive a change of government. 

WATCH | Energy executive says a guaranteed carbon tax makes sense, but the devil is in the details: 

The proposal was included in the new emissions reductions plan unveiled on Tuesday, although details are scarce.

It would provide a fixed carbon price over a time period, known as carbon contracts for differences (CCFD). The federal emission plan notes CCFD "enshrine future price levels in contracts between the government and low-carbon project investors, thereby de-risking private sector low-carbon investments."

While it's relatively new in policy circles in Canada, CCFD are already in use in Europe.

"It's significant. It's an innovative approach and one that will certainly make a difference," said Adam Auer, the vice president of environment and sustainability for the Cement Association of Canada.

The policy could encourage companies to invest in new infrastructure, substituting fossil fuels, integrating lower-carbon materials into cement, and developing carbon capture and storage technologies, among others.

While CCFD is not a silver bullet, Auer said it would provide more predictability as companies consider making big capital investment decisions.

"You need to understand whether you're going to save more than you spend," he said.

Next month, the federal carbon price rises another $10 to $50 per tonne of emissions produced and will increase further to $170 a tonne by 2030.