Carbon tax likely for China polluters within 3 years

A draft of a new system of taxation has been submitted by the Fiscal Science Research Center of the Ministry of Finance to the ministry for review. The plan would impose a tax on emissions of greenhouse gases, Su Ming, deputy director of the center, said on Thursday.

Su said the tax is likely to be charged at a rate of 10 yuan (USD1.59) for each tonne of carbon dioxide that a business or other operation discharges. That rate is expected to increase gradually over time.

The main targets of the tax will be large users of coal, crude oil and natural gas, and tax cuts will be given to companies that take steps to reduce their emissions, Su said.

Jiang Kejun, a researcher with the National Development and Reform Commission's Energy Research Institute, who helped draft the tax proposal, said the tax is likely to be collected only from producers and wholesalers of fossil-fuel based energy which will make it easier to collect.

Meanwhile, the additional revenue from a carbon tax will make it easier for the government to lower other sorts of taxes imposed on businesses, such as income taxes, he said.

Lin Boqiang, director of Xiamen University's China Center for Energy Economics Research, said there are still details to be decided about the plan. "Unlike the measurement of pollutants, carbon emission can be found in all parts of the value chain," Lin said. "So a tracking system will have to be established to carry out the plan."

Late last year, the National Bureau of Statistics said that indexes measuring emissions of greenhouse gases and power consumption will be published periodically as a test this year.