The Chinese government is planning to impose carbon tax, according to a high ranking official in the Ministry of Finance. Su Ming, deputy director of the Institute of Financial Science in the Ministry of Finance, said the government is working on plans to impose an environment tax, an energy tax and a carbon tax.

At the 2009 High-level Forum on Sustainable Development of China's Energy Resources, Su Ming said the government's basic approach is to tax emissions of carbon dioxide, sulfur dioxide, nitrogen oxide and industrial wastewater. The carbon tax is the key element of the plan so it will be given detailed consideration first.

The carbon tax is aimed at protecting the environment and slowing global warming by reducing carbon dioxide emissions. The tax will be levied pro rata on coal and petrochemical products such as gasoline, aircraft fuel and natural gas.

A panel of 20 experts from seven government departments, sponsored by the US Environmental Foundation, and led by Su Ming, has been studying the implementation of a carbon tax for over a year. Su said their research findings will be published in the next 2-3 months, but added that as yet the exact date for the implementation of the tax has not yet been decided. A plan for an energy tax has been drafted, and several departments are working together on a plan for an environment tax. When the new taxes are implemented, current levies on effluent discharges will be abolished.

The carbon tax will directly affect coal, petroleum and natural gas companies. It is hard to estimate how great the impact will be since the tax rate has not yet been fixed. But Su said that the initial rate would not be set so high as to impose too great a burden on companies.

Director of Global Climate Change Solutions for the World Wildlife Yang Fuqiang told reporters that the energy tax would mainly target the coal industry because the petroleum industry already pays consumption tax. According to Yang, when the energy tax is put into practice, companies will pay at least 40 yuan per ton of carbon dioxide emitted.

Background:

Carbon was identified as a key index for monitoring and regulating the economy in the China Carbon Balance Trade Framework, a report jointly produced last year by the China Environmental Culture Promotion Association and the China Institute of Development Strategy Studies.

(China.org.cn by Ren Zhongxi, April 22, 2009)