China to get emissions tax?

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BEIJING, Feb. 21 (UPI) -- China has indicated it plans to introduce a tax on carbon dioxide emissions.

Jia Chen, who heads the tax policy division at the Ministry of Finance, in a posting on the ministry's website, said China would introduce a set of new taxation policies aimed at preserving the environment, reports state-run Xinhua news agency.

While Jia didn't indicate tax amounts or a possible timetable, in 2011 the ministry had proposed a levy starting at $1.60 per ton of carbon, rising to $8 per ton by 2020.

Jia's article comes amid record levels of air pollution in Beijing in the past month, sometimes reaching 30 times higher than levels considered safe by the World Health Organization. China is the world's biggest emitter of carbon.

Earlier this month, the State Council called for domestic oil refiners to accelerate the process of introducing cleaner transport fuels.

Jia said the government would collect an environmental protection tax instead of pollutant discharge fees.

Also, to conserve the country's natural resources, Jia said the government would implement tax reforms by taxing coal based on prices instead of sales volumes, in addition to raising coal taxes.

Jia also suggested that other mining products and water should be subjected to resource levies.

The measures, Jia said, would boost existing efforts "to continue to improve and implement tax policy to support energy conservation, environmental protection and comprehensive utilization of resources."

China has already launched pilot emissions trading schemes in Beijing, Tianjin, Shanghai, Chongqing and Shenzhen, as well as the provinces of Guangdong and Hubei as part of its 12th five-year plan for 2011-15.

Speaking on the sidelines of the Doha climate talks last December, Wang Shu, an official from China's National Development and Reform Commission, said the government hopes to roll out the carbon market to other regions and eventually across the nation in the 13th five-year plan.

Whether it is through a carbon tax or an emissions trading scheme, the most important task for China is to put a price on carbon, says Terry Townshend, deputy secretary-general, Policy Development, for Global International, a worldwide organization that as part of its mission aims to support legislators on climate change.

In a report on news site Responding to Climate Change, Townshend said there appears to be an internal debate in China about who should control the revenue from carbon pricing.

"The money raised from a carbon tax would be controlled by the Ministry of Finance with emissions trading being controlled by the National Development and Reform Commission, the powerful planning ministry," Townshend said. "Hence, each body is promoting the mechanism that would strengthen their own influence."