China plans tax on carbon emissions

Published: Jan. 9, 2012 at 1:21 PM

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BEIJING, Jan. 9 (UPI) -- China, the world's top emitter of greenhouse gases, plans a tax on carbon emissions.

The tax rate is likely to be $1.59 for each ton of carbon emitted by businesses or other operations, but is expected to increase gradually over time, said Su Ming, deputy director of the Fiscal Science Research Center of the Ministry of Finance, China Daily newspaper reports.

The carbon tax scheme, aimed primarily at large users of coal, crude oil and natural gas, is expected to be implemented before the end of China's 2011-15 five-year plan.

Tax cuts will be given to companies that take steps to reduce emissions, Su said.

In 2010, China emitted 8.33 billion tons of carbon dioxide, representing a quarter of total global emissions, a report by the British energy company BP PLC indicates.

Lin Boqiang, director of Xiamen University's China Center for Energy Economics Research, said the carbon tax should be a means of cutting China's emissions rather than a source of fiscal revenue.

But China's move has irked opponents of Australia's carbon tax law, in which 500 of Australia's top polluting companies will pay $24 for each ton of carbon they emit, beginning next July. In 2015 it converts to an emissions trading scheme with a floating price starting at a floor of $15.

Australian Coal Association chief executive Nikki Williams told The Australian newspaper that with such a low starting price, China's carbon tax is clearly not intended to shift the Chinese economy away from coal "because they know how important coal is to their future growth prospects."

But Australia's carbon tax, Williams said, was specifically designed to shift energy production away from coal.

"Our concern continues to be that Australian industries will be significantly disadvantaged by a domestic scheme that is the broadest and most expensive in the world," she said, adding that it will cost Australia's coal industry $18.4 billion by 2020.

A spokesman for the Minerals Council of Australia, noting that China's carbon price will be an "astonishing one-fourteenth of Australia's" said "that Australians will be paying the biggest carbon tax in the world by a long stretch."

"This will exact a substantial cost on Australian industry and households without delivering any environmental dividend."

But the Australian government maintains the average Australian household would get $10.22 a week in extra benefits and tax breaks, compared to the $9.20 in higher living costs as a result of the carbon tax.

Source: http://pheed.upi.com/click.phdo?i=d418cd906aeaf865ee3a7539e77b3891

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