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March 03, 2011

China's Energy Plan and discussion of a carbon tax starting in 2013-2016

China plans to reduce its energy consumption per unit of GDP, or carbon intensity, by 40 to 45 percent by 2020 based on 2005 level.

China has set a target of reducing emissions of lead, mercury, chromium, cadmium and arsenic by 15 percent from 2007 levels over the next five years.

China discharged 900 tonnes of the highly toxic metals in 2007, the paper reported, and Environment Minister Zhou Shengxian said 75 billion yuan (US$11.4 billion) would be needed over the five years to address the problem.



Nearly 4,500 enterprises, including mines, battery manufacturers, leather producers and the chemical industry, have been identified as key monitoring targets.

“More than 30 major heavy-metal poisoning incidents have occurred since 2009, posing a grave threat to public health, especially to children,” Zhou said.

Last month 28 children, including some less than a year old, were rushed to hospital in the eastern province of Anhui with lead poisoning caused by a local battery factory.

A report earlier this week found that up to 10 percent of rice grown in China is tainted with heavy metals.

In China, industrial wastewater, gas and residue are the main polluters of land and water, which will eventually pollute crops and fish.

It was estimated that every year in China more than 12 million tons of grain were polluted by heavy metals, causing direct economic losses of 20 billion yuan ($3 billion), Xinhua News Agency reported in 2006.

Jiang Kejun, senior researcher at the National Development Reform and Commission’s Energy Research Institute is a supporter of a carbon tax

Jiang Kejun: The overall tax burden is very high, but a carbon tax could be revenue-neutral. This means increases are offset by reductions elsewhere, so that total revenue doesn’t change. If we collect 100 billion yuan (US$15 billion) in carbon taxes, we cut 100 billion of other taxes – that’s easily done.

We have put forward a number of proposals, such as reducing value-added tax or business tax. We initially thought about cutting income tax, but found that, as the poorest people do not earn enough to pay taxes, we would instead need to raise subsidies for that group.

Is there a timetable for a carbon tax?

JK: There are reports that it will start in 2013, but there’s no word on how environmental taxes will be applied and so it’s still too early to tell. As environmental taxes are a new type of tax, the National People’s Congress [China’s highest organ of power] will need to approve them – and carbon taxes are one type of environmental tax. I personally would like to see a carbon tax put in place in 2012.

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