Alberta wants to reduce emissions to 14 per cent below 2005 levels by the year 2050. (CBC)

Oil-rich Alberta is spending $4 billion from this year's provincial surplus to fund carbon capture and public transit projects in a bid to reduce greenhouse gas emissions.

Premier Ed Stelmach announced Tuesday that $2 billion will go to major projects to capture carbon dioxide from power plants and industrial facilities, and inject it deep underground for permanent storage.

Another $2 billion will be invested in public transit across the province, which will help cut emissions by having fewer people drive. Alberta's infrastructure and transportation minister said the money is available, not for existing public transit, but for new projects including inner city transit, and commuter-connector rail lines.

"It's not population based. It's not per-capita based. This fund is for all Alberta anywhere in Alberta, so the people that are the most innovative will be able to proceed with their project sooner," said Luke Ouellete.

"We can't wait for others to act. We can't wait for others to determine Albertans' future," said Stelmach.

Stelmach said carbon capture and storage projects are the best way to help the province meet the targets it set in January. As part of its climate-change plan, Alberta wants to reduce emissions to 14 per cent below 2005 levels by the year 2050.

"We're committed to the targets. Most of the carbon is emitted by coal-fired electricity generating plants. To meet the targets immediately, we have to capture that CO2," said Stelmach in Calgary on Tuesday.

Equals a million vehicles off the road

Alberta has been widely criticized for requiring industries to reduce only the intensity of greenhouse gas emissions, while allowing overall emissions to increase from the oilsands.

"The only other alternative is to reduce generation, but we can't do that, because not only will that reduce the kilowatt rate for Albertans … but it will create uncertainty," he said of the potential impact on the oil and gas and manufacturing sectors.

Stelmach boasted that the new projects could reduce emissions by up to five million tonnes annually, or the equivalent of taking a million vehicles off the road.

The province has issued a request for expressions of interest to begin identifying carbon capture and storage proposals that can be built quickly and with the greatest effectiveness.

Alberta's surplus is expected to be bigger than predicted this year due to higher-than-forecast oil and gas prices.