China, world’s largest emitter of greenhouse gasses, will tax carbon

China’s Ministry of Finance has announced that the country will levy a tax on carbon emissions, reports Xinhua. Policy experts in the United States and Europe have long argued that a carbon tax is the most effective way to reduce emissions of carbon dioxide and other greenhouse gasses, but implementing one in most large industrialized countries has always seemed politically infeasible.

In the same announcement, China’s Ministry of Finance said that direct taxes on resources, including coal and water, will also be forthcoming.

Details on the carbon tax are scant, but previous reports indicated that it would come into force by 2015 and might start at 10 yuan ($1.60) per tonne of carbon, rising to 50 yuan ($8) per tonne by 2020. Notably, the tax would be collected by local tax authorities, and not municipal environmental protection bureaus.

Aside from concerns about climate change, China’s carbon tax could be an effort to stem the country’s enormous appetite for coal, which is now nearly as large as the rest of the world combined.

http://qz.com/55276/china-worlds-largest-emitter-of-greenhouse-gasses-will-tax-carbon/

What Would China’s Carbon Tax Regime Look Like

It’s an environmental tax, not a carbon tax

The first thing I want to clarify is that calling it a “carbon tax” would be a gross misnomer, because for a long time to come, the majority of the tax collected from this would still be from what used to be called “pollution discharge fees”, not from taxing carbon emissions. It’s a change in form, but still a significant one, and here is why:

When pollution discharge only triggers a “fee”, local government habitually using this fee reduction or even elimination as an incentive for industries to settle into their jurisdiction and generate GDP. Since the fee is administrative, not legal, industries can easily evade the fee by building a close relationship with the local government, without running into legal issues. A conversion of that “fee” to “tax” would place legal responsibilities on the companies.

http://blogs.law.harvard.edu/ellachou/2013/02/20/what-would-chinas-carbon-tax-regime-look-like/