China now burns almost as much coal as the rest of the world combined. As the world saw vividly this year, the effects are deadly. Many in the U.S. and elsewhere have long blamed China for not cooperating with global efforts to limit greenhouse gas emissions, but a recent move by the Ministry of Finance to impose a carbon tax has changed the conversation. From Xinhua:
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 Responding to Climate Change website looks at how this new effort will work with the current trial cap-and -trade program that China announced early this year:
Joanna Lewis, assistant professor at Georgetown University and an expert in Chinese energy policy told RTCC it is unclear how the two would work together.
“The government has been discussing the implementation of a carbon tax for several years so it will be interesting to see if it happens this year,” she said.
It is also not yet clear whether the tax would apply to the same facilities covered under the pilot cap and trade programs for CO2,
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