Climate change has resulted in progressively adverse impacts resulting in an increase in stakeholder pressure for reducing greenhouse gas (GHG) emissions. The Alberta oil sands contribute to almost 10% of Canada’s GHG emissions. The Carbon Competitiveness Regulation has been proposed to reduce emissions directly related to Alberta oil sands production. This paper (1) explores the cost effectiveness of adopting the new regulation through literature review and data analysis, (2) identifies the challenges of reducing emissions, and (3) develops recommendations to improve the policy process. An environmental analysis is presented to uncover the emissions related to the oils sands, followed up a policy critique of the proposed regulation, and a data assessment of the potential economic costs related to implementing it effectively. The proposed regulation appears to be a cost effective approach to reducing emissions, but faces challenges including oil prices, market conditions, technology availability, and carbon leakage risks.