I can see how this one’s shaping up. Paired with the breathless (and preposterous) statement that China is spending 40% of its stimulus plan on green projects (often phrased as “China’s leaders are investing $12.6 million every hour to green their economy”) will be the confident assertion that China is imposing a tax on carbon.
Reuters broke the news in English that
Chinese state think tank researchers will soon issue preliminary proposals for a carbon tax that may one day become part of the government’s efforts to tame growing greenhouse gas emissions, experts told local media.
Su Ming, deputy director of an institute under China’s Ministry of Finance, said the research on a carbon tax had been requested by that ministry and the Ministry of Environmental Protection and the proposal may be published “within a month,” the National Business Daily reported on Thursday.
Su told the paper the proposal was part of a package of possible taxes on environmental damage under study. The others are taxes on sulphur dioxide and ammonia pollutants, as well as on waste water.
Reuters also sensibly noted that
The carbon tax proposal, however, appears a long way from the prospect of implementation.
Nevertheless fanciful speculations have begun.
So what to make of the carbon tax proposal? Maybe the environmental balance of power between the old guard and the new guard in Bejing-as profiled by Linda Jakobson for Chatham House-is more equal than many observers think.
Or perhaps China is just polishing its image ahead of the big Copenhagen conference in December that will aim to craft a successor to the Kyoto Protocol. Most Republicans-and plenty of moderate Democrats-are loath to take any action to curb U.S. greenhouse-gas emissions unless China and other developing countries play ball, too.
Or perhaps none of the above. The tax is merely a gleam in the eye of certain factions within China’s Ministry of Finance (MOF) and Ministry of Environmental Protection (MEP). Neither of these agencies has a significant role in China’s climate change negotiations, and it is highly unlikely this proposal has any connection with China’s Copenhagen strategy.
An environmental tax has been on the drawing board in China for at least five years but it always dies somewhere within the State Council’s regulatory review process. The environmental tax would have taxed traditional pollutants such as sulfur dioxide and chemical oxygen demand (COD) which are already subject to a levy system (a tax by any other name). In other words, the proposed environmental tax would only have replaced existing fees, yet it still faced significant opposition from forces sufficiently powerful enough to derail it. These would be the same forces who would oppose a carbon tax (the current levy system does not impose fees on carbon emissions).
There is absolutely nothing to indicate that a carbon tax is being considered by China’s climate negotiators. I feel pretty confident in predicting China will not enact a carbon tax prior to Copenhagen, and there is no certainty that it will ever impose one. Such a tax may be a new pet project of China’s MEP, but then so was the Green GDP and we all know how successful that project was.
9 responses so far ↓
1 Elizabeth Balkan // May 4, 2009 at 10:06 am
Nice post, Charlie!
Actually, I think (and find it interesting that) China.org was the first media source to break the news on April 22, not Reuters (
http://www.china.org.cn/environment/policies_announcements/2009-04/22/content_17652059.htm), which followed a barely discernible announcement by China Climate Change info-net on April 17 (http://www.ccchina.gov.cn/en/NewsInfo.asp?NewsId=11859).
I’ve written a post about this issue as well, which will appear on SolveClimate.com tomorrow.
eb
2 cmcelwee // May 4, 2009 at 10:31 am
Elizabeth, Thanks for the links. I thought I had read about the tax before the Reuters’ article, but I couldn’t find anything else in English. I had seen this report in Chinese from April 21, and the China.org article seems to be a translation of it. The China Climate Change report is the first I’ve seen the NDRC mentioned in connection with the tax. At best the tax will be used to fight off threats of carbon import tariffs on Chinese products. Unless a tax is imposed in conjunction with binding targets, I don’t think it would amount to a credible carbon reduction mechanism in China. Send a link to your post when its up.
3 Rob Earley // May 4, 2009 at 4:56 pm
Well, folks in NDRC / Climate Change department didn’t disapprove of the development of a voluntary “climate registry” (in partnership with the U.S. Climate Registry) pilot in Guangdong province. As you might know, the Climate Registry system is one of the candidates under consideration for regulating GHG emissions in the US.
Anyway, the key is that you can’t manage (tax or whatever) anything that you can’t measure. So, until there is some coherent way of measuring carbon content of things, it will be hard to establish a broad carbon tax…no?
4 cmcelwee // May 4, 2009 at 6:13 pm
Thanks Rob. I’ve never known China to turn down a pilot project on anything. The real test, of course, is whether there is any follow on action once the pilot proves its effectiveness. You are absolutely correct on the need for accurate measurements, and we all know how challenging that can be in China.
5 Elizabeth Balkan // May 5, 2009 at 4:26 am
Here’s the link to my post I mentioned “China Floats Carbon Tax Plan as a Means to Curb Emissions” http://tinyurl.com/d3o4dm
eb
6 Greg // May 5, 2009 at 2:30 pm
I think this could be a great mechanism to stop the lies of carbon trading in their tracks.
7 Greener China // May 7, 2009 at 12:07 am
Politically easy target + finite space + previous statements on export tax = green tax on foreign exporters?
1) Export Processing Zones are exporting firms
2) EPZ are full of full of foreign firms - always easily political targets
3) EPZ offer ease of measurements - area is finite, energy typically provided within the parks, foreign firms cannot fight back like domestic firm should the inspector drop in and install some environmental equipment
… could this be “more” likely as the pilot than something geared towards domestic industry or large industrial players?
R
8 Julian Wong, The Green Leap Forward // May 7, 2009 at 12:12 pm
Ahhhhh Elizabeth (and Charlie),
I think neither Reuters nor China.org was the first to break the news. Check out the last full paragraph of this link from last October from this crazy blogger:
http://greenleapforward.com/2008/10/20/china-carbon-forum-2008-review/
9 cmcelwee // May 7, 2009 at 12:17 pm
My sincerest apologies Julian! I should have known you would have had the scoop on this one. Sorry for not giving credit where credit is due.
Leave a Comment