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Source: Reuters

China ministries propose carbon tax from 2012 -report

Published: 10 May 2010 20:54:59 PST

BEIJING, May 11 - China could impose a carbon tax as soon as 2012, and officials have proposed it start from 10 yuan ($1.46) to 20 yuan per tonne of carbon dioxide, a Chinese newspaper said on Tuesday.

The Chinese-language Economic Information Daily said officials and experts from the Ministry of Finance and other state agencies have been studying how to introduce a tax aimed at curbing carbon dioxide emissions from fossil fuels.

"The next step will be stepping up the pace in resource tax reform, and after these reforms, in 2012 or 2013, we will introduce a carbon tax, but one with a low starting point," an unnamed expert from the Ministry of Finance said, according to the report.

Chinese officials have previously raised the idea of a carbon tax, but until now there have been few specifics of possible government proposals.

China is the world's biggest emitter of greenhouse gases from human activity, especially carbon dioxide from coal, oil and gas consumption.

Faced with rising international pressure to curb those emissions, the government has vowed to cut "carbon intensity" -- the amount of carbon dioxide emitted to create each unit of economic value -- by 40 to 45 percent by 2020, compared with 2005 levels.

Chinese Premier Wen Jiabao warned last week that the country was in danger of failing to meet goals to save energy and cut pollution. With the nation's economy building up speed, officials appear to be turning to deeper reforms to energy pricing policy and taxes.

An unnamed source told the paper that the tax would be based on current resource taxes, and would cover fossil fuels, rather than all sources of carbon dioxide output.

But Chinese agencies appear to have different views of how the tax would work, according to the newspaper report.

The Ministry of Environmental Protection wants the tax to start at 20 yuan per tonne of carbon dioxide, and then rise to 50 yuan per tonne by 2020. That would mean carbon tax rates of 11 yuan per tonne of coal and 17 per tonne of oil, said the report, citing a study by a ministry institute.

The Ministry of Finance study also said the tax reforms may also include concessions for industries that would be heavily effected, provided that the businesses agree to work towards reducing energy consumption and emissions. ($1=6.826 Yuan)

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