Friday, February 22, 2013



Climate change: China acts

Big news today: China is planning to introduce a carbon tax to curb greenhouse gas emissions:

China will proactively introduce a set of new taxation policies designed to preserve the environment, including a tax on carbon dioxide emissions, according to a senior official with the Ministry of Finance (MOF).

The government will collect the environmental protection tax instead of pollutant discharge fees, as well as levy a tax on carbon dioxide emissions, Jia Chen, head of the ministry's tax policy division, wrote in an article published on the MOF's website.


The tax will start out low, and increase gradually, to slowly internalise the cost of carbon. There are all sorts of doubts about its effectiveness (mostly focused on the practical problems of collecting taxe sin China's corrupt system; see here for an assessment of it as straight policy), but the blunt fact is that they're actually doing something - and far more than anything the US government is even considering. The US has long complained that it shouldn't have to reduce emissions while China doesn't; China has now taken the lead and put the ball firmly in the US's court. The US now needs to rise to the challenge.