A new economic analysis suggests Alberta’s commitment to reach net-zero greenhouse gas emissions by 2050 could shrink the province’s economy by nearly $400 billion over the next 25 years compared with a business-as-usual path.
The modeling, prepared by Navius Research for policy analyst Lennie Kaplan and published through EnergyNow, estimates Alberta’s cumulative gross domestic product could be $397 billion, or about 3%, lower between 2025 and 2050 if the province follows through on its net-zero-by-2050 target rather than continuing under current announced policies. Kaplan, a former senior manager in Alberta’s Ministry of Treasury Board and Finance who worked on fiscal and economic assessments of energy and climate policy, commissioned the modeling using Navius Research’s gTech/IESD model.
According to the analysis, Kaplan has submitted multiple Access to Information requests to the Alberta government over the past several years seeking its own assessment of the economic and fiscal impact of the net-zero pledge, which has been part of the province’s climate strategy since April 2023. He says the government has not shared such an assessment, prompting him to commission the independent modeling.
How the Scenarios Compare
The analysis compares two scenarios: a business-as-usual case built around a binding Alberta carbon price of $130 per tonne by 2030, held stable through 2050, and a net-zero scenario in which an economy-wide emissions cap declines steadily to reach net zero by 2050 through what Kaplan describes as the lowest-cost policy path. Both scenarios assume the elimination of the federal Oil and Gas Emissions Cap and the Clean Electricity Regulation, a 75% cut in methane emissions from 2014 levels by 2035, and continued federal and provincial investment tax credits for technologies such as carbon capture and storage. The modeling also assumes Alberta’s oil production climbs to roughly 7.6 million barrels per day by 2035, broadly in line with the province’s stated roadmap target of 8 million barrels per day.
Kaplan notes that the $130-per-tonne carbon price referenced in the Canada-Alberta implementation agreement is currently a policy objective rather than a fully designed policy, and argues that because of this the projected economic impacts of the net-zero scenario may be understated.
Projected Losses to GDP, Jobs and Revenue
Under the net-zero scenario, Alberta’s GDP is estimated to be $45 billion lower in 2050 alone compared with business-as-usual, a 6% reduction, with the oil and gas sector excluding oil sands seeing cumulative GDP losses of $193 billion, or 11%, over the 25-year period.
Employment is also projected to take a hit. Total provincial employment, measured in full-time equivalents, is estimated to be 126,000 lower in 2050, a 3.4% decline, while employment in the oil and gas sector excluding oil sands is projected to be 37,000 lower, a 21% drop. The analysis also estimates oil production would be 1.1 million barrels per day lower, a 14% reduction, and oil sands production 514,000 barrels per day lower, a 9% reduction, by 2050 relative to the business-as-usual path.
On the fiscal side, Alberta government revenues are projected to be $5 billion lower in 2050, a 6% decline, with cumulative government revenue losses of $51 billion, or 3%, over the full 2025-to-2050 period.
Projected Alberta Impacts of Net-Zero-by-2050 Path vs. Business-as-Usual
Calls for Greater Transparency
Kaplan says the lack of a published government impact assessment for the net-zero commitment is a concern, particularly as Alberta has reaffirmed the target through a memorandum of understanding with the federal government. He argues that unless the Alberta government produces its own figures showing a smaller impact, it should reconsider the 2050 target in favour of what he describes as more realistic and achievable emissions reduction goals.
The modeling was released separately from other recent Alberta energy policy developments, including the province’s continued push for a proposed West Coast oil pipeline intended to move Alberta crude to Pacific tidewater markets.
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