Carbon Tax Policy in China and Other Parallel Policies Suggested

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Chan Chung

Carbon Tax Policy in China and Other Parallel Policies Suggested

TECON 460

Professor William McGuire

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Introduction

Seriousness of Chinese environmental pollution has been numerously reported

through all sorts of media around us since few decades ago. According to the World Health

Organization (WHO), the concentrations of air pollutants in China have exceeded the

recommended global standards. However, we are not very well informed about how the

Chinese government has been setting up the measures against the pollution and what kinds of

benefits or harms would be given as it takes the measures. According to the Reuters, China

has decided to declare war on its pollution as it published several policies and ideas which

were aimed at addressing environmental issues last year, 2014 (Martina & Reklev, 2014). The

new plans under Premier Li Keqiang are expected to be an epoch-making contribution in

changing China’s loose environmental tax into well-systemized levies on major polluters.

However, the vice environment minister, Zhu Guangyao, said the efforts to diminishing

pollution in China will get in the way of implementing carbon dioxide emission tax (Chen &

Reklev, 2014). The importance of carbon tax policy has been decreased since last year as the

Premier Li declared war upon pollutions in China and as the policy became in doubt due to

the problem of air pollution being unmanageably serious. Henceforth, the government of

China has been considering abolition of the carbon tax policy, as Australia under a new

conservative government is currently trying. The emission tax policy has been increasingly

controversial over regions not only of China but also of the world during the past decades.

Through this research paper, I would like to briefly introduce why environmental pollution of

China became notorious and why the government is not pursuing implementation of carbon

dioxide emission tax policy anymore, but trying to follow Premier Li Keqiang’s new policy.

Also I will present some proposals of how the Chinese government should deal with carbon

tax policy and furthermore, environmental pollution issues.

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Background

China until the late nineteenth century was relatively underdeveloped compared to

the western countries and Japan but it had various resources over the vast land area. For these

reasons, the West and Japan took over China and this time was the starting point of Chinese

industrialization. Due to fairly late industrialization, abundant but cheap labor resources and

very few environmental levies, China had to profoundly rely on heavy industries built during

the Japanese occupation to catch up the economies of western countries and Japan. During

the Reform era, since 1978 until now, Chinese government has been putting lots of effort on

restoring damaged economic infrastructures from the Socialist era and building up the

bottom-heavy economy. Through all of these processes, the government had to focus on

developing national economy rather than protecting its environment. However, since past few

decades ago, Chinese government started to consider its ecological problems and publish

various policies and plans for environmental protection to prevent increasing carbon

emissions through various cities in China. (See the appendix.) Although the all-out efforts

might have been contributing towards a better surrounding, it seems quite a struggle for

China because of its heavily polluting industries and uncooperative local governments. They

demand a policy that works in accordance to their current environmental situation.

In March 2014, the Chinese ministry of environment declared that carbon dioxide

emission tax policy will be no longer implemented but instead they will exercise Premier Li’s

policy which includes full-blown tax targeting on the source of air pollution and eliminating

outdated industrial plants and energy producers will be weighted. At this point, the carbon tax

policy has been gradually controversial among politicians not only of China but also of the

world. The premier of China had come up with a few strategies addressing the environmental

problems in China starting from agricultural pollution to the contaminated water source in

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bits and parts of China. Premier Li had turned his words of promise into action by declaring

an estimated budget of 2 trillion Yuan (approximately 330 billion US dollars) to tackle the

severe pollution of water resources that acts as the most important element for agriculture and

for the consumption of the people in China. By doing so, they will be able to improve the

average quality of the surroundings. “He also stated that China is aiming for a conversion of

333,300 hectares of farmland to forest and grassland to fight desertification and recover

wetlands that they have previously encountered.” (Martina & Reklev, 2014)

Proposal

First of all, I do not clearly understand why the vice environment minister referred

that Australian government has been trying to abolish the carbon tax policy. “Zhu also

referred to the fact that Australia, under a new conservative government, is trying to abolish