China plans to levy carbon tax
China is exploring the possibility of levying a carbon tax at a provincial level in order to help mitigate climate change, a recent report shows.
The China Environmental Culture Promotion Association (CECPA) and the China Institute of Development Strategy Studies compiled the report.
Niu Wenyuan, a researcher on sustainable development from the Chinese Academy of Sciences, led the report’s team.
It proposes using carbon as a quantitative barometer in monitoring economic activities and promoting ecological compensation among the provinces.
Calculating carbon emissions in the provinces is based on measuring the difference between a carbon source and its sink (the carbon reservoir that is accumulated and stored after its release) as an index to measure the release and removal of greenhouse gases (GHG) in the atmosphere.
Provinces that have higher carbon emissions than carbon captures should pay for the excess based on a certain amount of local gross domestic products (GDP), thus setting up a carbon fund.
The fund, according to experts’ calculations, could be set between 0.05 percent to 0.15 percent of provincial GDP, or about 13 billion yuan to 39 billion yuan for 2006 for instance.
Provinces with more carbon captures than emissions would be entitled to money from the central government based on the same ratio of local GDP to further encourage carbon neutral efforts.
According to the calculations, Shandong, Shanxi and Hebei provinces are the largest carbon emitters in China, while the Tibet autonomous region and provinces of Qinghai and Yunnan have the least GHG emissions.
The report also proposes establishing a special committee to manage the carbon fund to be used for promoting technological innovations for environmental protection, as well as projects like the Clean Development Mechanism.
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