Newly published comments made by Vice Premier Li Keqiang last December outline China’s energy policy priorities, and appear to confirm the introduction of new pollution taxes as part of the country’s 12th Five Year Plan. From AlertNet:

“It will be very difficult to fundamentally alter our country’s energy supply structure which is based on coal consumption,” Li said, noting that coal provided about 70 percent of China’s energy needs.

“If we rely on the international market to satisfy our energy supplies, there are big risks and also big costs,” said Li.

“To ensure such large energy needs, we must both increase investment in energy development and also ensure the security of international and domestic energy supply routes, and that requires a major foreign policy effort. Therefore, energy-saving must always be a priority.”

Li, who has an economics degree, did not give specifics about policies Beijing may take up to meet its energy conservation and pollution-cutting goals. But he said the government should focus on developing policies to ensure that “polluters pay”.

“Establish an effective system of incentives and constraints so that law-abiding businesses gain economically and law-breaking businesses pay a heavy price,” he said.

China would “accelerate resource fee and taxation reforms”, he added.

Recent coverage in The Guardian of the forthcoming Five Year Plan’s environmental components included details of a proposed pollution tax scheme.

The environmental tax – which will levy fees according to discharges of sulphur dioxide, sewage and other contaminants – is intended as a disincentive for polluting industries, many of which have flocked to China to take advantage of low costs and weak regulations. Officials and academics have been studying the options for several years, but government advisers have told the Guardian the policy is certain to be adopted.

“The environment tax is going to happen. This is evident in the proposals for the next five year plan,” said Ma Zhong, director of the School of Environment and National Resources at Renmin University in Beijing. “It is likely to be levied nationwide, but there is also a possibility that it will initially be introduced in selected regions.” …

Carbon dioxide, a key concern given China’s status as the world’s biggest greenhouse gas emitter, may be included in the system at a later stage, though the issue is being debated. “Some want to put them together, but I think a carbon tax should be different and at a higher level and from the environmental tax,” said Zhang.

The coverage also included reactions to the proposals from several prominent environmental organisations:

“We are expecting to see a truly green five-year plan, which for the first time will contain really detailed measures and teeth in it,” said Yang Ailun of Greenpeace. “The next five years will be the defining moment for China’s environmental movement. There will be more disasters and more of a struggle to impose tougher regulations. Local interests groups have grown quite strong. They won’t accept change quietly.” …

Ma Jun, of the Institute for Public and Environmental Affairs, said the government would take a big step forward if it set absolute limits on pollutants and resource consumption, rather than the incremental, economy-linked targets seen until now.

“This is the first major effort to translate words into actions. Before the government set targets and talked of improvement, but this is the first really major effort to integrate that into an economic plan. They should get credit for that,” said Ma … “[But] I don’t consider this a turning point … We haven’t seen air and water really get clean yet. The measures under discussion are not sufficient at all. ” …

“I’m hopeful about the next five-year plan,” said Li Bo of Friends of Nature. “The government is prepared to go further than before. But we should do more. Until now, low carbon concepts have been introduced only for industry. In the future, I hope those ideas can be adopted in the community so we see a change in lifestyles.”

Institutional obstacles to the plan’s successful implementation remain, with loopholes and lax supervision threatening to undermine enforcement of new policies. Some of these problems were discussed in a recent China Dialogue post by Tang Hao.