*[Enwl-eng] China Moves to Implement A Carbon Tax

[ENWLine]

*China to introduce carbon tax: official*

English.news.cn 2013-02-19 21:05:55



http://news.xinhuanet.com/english/china/2013-02/19/c_132178898.htm



BEIJING, Feb. 19 (Xinhua) -- China will proactively introduce a set of
new taxation policies designed to preserve the environment, including a
tax on carbon dioxide emissions, according to a senior official with the
Ministry of Finance (MOF).

The government will collect the environmental protection tax instead of
pollutant discharge fees, as well as levy a tax on carbon dioxide
emissions, Jia Chen, head of the ministry's tax policy division, wrote
in an article published on the MOF's website.

It will be the local taxation authority, rather than the environmental
protection department, that will collect the taxes.

The government is also looking into the possibility of taxing
energy-intensive products such as batteries, as well as luxury goods
such as aircraft that are not used for public transportation, according
to Jia.

To conserve natural resources, the government will push forward resource
tax reforms by taxing coal based on prices instead of sales volume, as
well as raising coal taxes. A resource tax will also be levied on water.

The article did not specify when the new measures will be implemented.

In 2010, MOF experts suggested levying a carbon tax in 2012 at 10 yuan
per tonne of carbon dioxide, as well as recommended increasing the tax
to 50 yuan per tonne by 2020.

China is among the world's largest emitters of greenhouse gas and has
set goals for cutting emissions. The government has vowed to reduce
carbon intensity, or the amount of carbon dioxide emitted per unit of
economic output, by 40 to 45 percent by 2020 in comparison to 2005 levels.
Editor: Hou Qiang

* * *

http://www.loe.org/shows/segments.html?programID=13-P13-00009&segmentID=2

*Chinese Carbon Tax*

Air Date: Week of March 1, 2013

Illustration Omitted:
Chinese pollution (photo: bigstockphoto.com)

Some US politicians argue that it's pointless for the United States to
take action on climate change until the Chinese curb their emissions.
But an official in China's Ministry of Finance recently wrote an article
advocating a tax on carbon. Deborah Seligsohn, a researcher at
University California at San Diego, tells host Steve Curwood that the
Chinese are taking climate change more seriously than many people think.

Transcript

CURWOOD: It's Living on Earth, I'm Steve Curwood. Not long ago China
edged out the United States as the world's top carbon emitter, and
debate there is intensifying over the best ways to rein in global
warming emissions. An official in the Chinese Ministry of Finance
recently wrote an article advocating - yes, you guessed it - a tax on
carbon. Deborah Seligsohn, a former State Department official who served
in Beijing, is now a researcher at the University of California at San
Diego. Deborah, welcome to Living on Earth.

SELIGSOHN: Thank you.

CURWOOD: So what do you make of this news? How significant is this?

SELIGSOHN: Well, I think this is a step up in the policy discussion of a
carbon tax in China. The Ministry of Finance has actually had people who
for quite a long time have thought that a carbon tax was a good idea.
But previous articles that we've seen were written by researchers or one
of their affiliated think tanks. This is written by an actual officer in
the Ministry. So while I'd still call it a commentary, and it's part of
a policy discussion, it is not an announcement of a new program, it
indicates stronger support than we've seen in the past.

CURWOOD: Why do you suppose the Ministry of Finance made this move now?

SELIGSOHN: It's hard to know. The Ministry is always looking for ways to
rebalance and revive the Chinese economy. They would like to see a
reduction in energy intensity, an increase in economic efficiency, a
shift from heavy industrial services. These are all things they think
would be good for the Chinese economy. And a carbon tax, which
essentially puts an extra cost on inefficiency and high energy use, and
generally sort of capital intensive industry, would be a way to advance
a number of their goals.

CURWOOD: So what you're saying is that yes, a carbon tax would affect
emissions, but there's a broader role in the economy. Is this what the
advocates are talking about?

SELIGSOHN: Yes, the advocates in the Ministry of Finance are
particularly actually interested in the broader impact on the economy.
Then there are groups within the environmental community who are, of
course, particularly concerned about this for its impact on reducing
carbon dioxide emissions. The Ministry of Finance says, "We have a
national commitment to reduce CO2 emissions and we have all these other
goals with our economy, and this is a great way to kill two birds with
one stone."

CURWOOD: So what effect would a carbon tax have on emissions of
greenhouse gas from China?

Illustration Omitted:
Deborah Seligsohn (photo: Kay Seligsohn Bullis)

SELIGSOHN: So a carbon tax, by adding a cost to using carbon-intensive
fuels, would help reduce their use. But how much would it do so and how
fast, in large part, depends on the size of the carbon tax. What is
interesting is there has been a certain amount of economic modeling done
on what kinds of carbon taxes would have, on what kind of impact, and
there's a lot of indication that putting a fairly modest tax on would
have an impact, and if the modest tax was placed with the announced
intention that it was going to increase over time, it would have quite a
sizable impact because industry would start to respond not only to the
current tax, but to the expected future tax hikes. So China could bring
this in gradually and modestly and still have quite an impact.

CURWOOD: Now, a number of people in the United States say that this
country, the US, can't take action on climate until China starts taking
it seriously. How do you respond to that?

SELIGSOHN: Well, China is taking it seriously. They have a commitment,
starting in Copenhagen, to actually reduce the carbon intensity of their
economy. And they take this international commitment quite seriously.
China is also in the process of implementing pilot cap and trade
programs in a number of cities. So different ministries within the
Chinese government prefer the two different options...the National
Development Reform Commission is more in favor of a cap and trade which
they would run...the Ministry of Finance is more in favor of a carbon
tax which it would run. So in the end which way it will come down, or
whether they will actually come up with a way to combine the two, which
in fact is what Australia is doing right now, I think that still remains
to be seen. What is clear is that there's a lot of policy innovation
going on using market mechanisms to control carbon. Now what we know
about carbon dioxide of course is certain atmospheric greenhouse gases
are the ultimate public goods problem, right? Once you emit them in the
world, you affect everyone in the world equally, right? So China looks
at those issues and says, yes, we're moving on CO2, but to do more we
really need to see the US do more. And given that the US is by far a
wealthier country, they kind of feel like, well, to match, you guys have
to show that you're moving...and frankly, the Chinese are quite
skeptical that the US is going to move. What they've seen over and over
again is they've done quite a few things in the last five to ten years,
and over that period the US has mostly debated.

CURWOOD: Deborah Seligsohn is a Researcher at the University of
California at San Diego. Thanks so much, Deborah.

SELIGSOHN: You're welcome.

*** NOTICE: In accordance with Title 17 U.S.C. Section 107, this
material is distributed, without profit, for research and educational
purposes only. ***



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Subject: News: China Moves to Implement A Carbon Tax


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