Government and Policy

Carbon tax likely, expert forecasts

By Fu Jing (China Daily)
Updated: 2010-05-10 07:10

Measure aims to help reduce greenhouse gas emissions

Heavy smoke is seen at the Shanghai Oil Refi nery, which caught fi re on Sunday. No casualties was reported.

BEIJING - China may start levying a carbon tax and further boost prices of fossil fuel for the next five years as a crucial incentive to cut greenhouse gas emissions and help realize green targets, a government-affiliated expert forecast.

"We expect China will start to levy various taxes only if they are helpful in mitigating greenhouse emissions and developing a low-carbon economy," Jiang Kejun, a senior researcher with the Energy Research Institute under the National Development and Reform Commission, said on Sunday.

"I think a carbon tax is likely to be levied during the 12th Five-year plan (2011-15) period," said Jiang. The National Development and Reform Commission is a Cabinet department responsible for the country's mid- and long-term development plan.

Apart from a carbon tax, Jiang said the government may begin to levy environmental and resource taxes. Meanwhile, China will greatly boost subsidies to support low-carbon technology research and development.

At a weekend climate change forum organized by the China Center for International Economic Exchanges, Jiang told China Daily that the government is serious about realizing its target of cutting carbon intensity by 40-45 percent by 2020 from 2005 levels and the government will implement "tougher measures" in the coming five years to realize the green goal.

Jiang said the taxation and fiscal incentives are just part of a portfolio of possible policy changes, which may turn into reality when China implements its low-carbon development pathway.

"We can possibly surpass the United States between 2020 to 2025 in terms of research and development investment," said Jiang. "If this comes true, we can start to dream of becoming a low-carbon technology leader in the world."

However, Jiang is pessimistic about the coming 10 years. China's total 400-billion-yuan ($59 billion) investment in scientific research and development, Jiang said, "is only about one sixth of the US's total, or only equal to what the US invests in clean energy research."

In clean technology research, Jiang said: "If we don't strive for radical efforts, we will still be left behind by the US, Europe and some other countries and regions."

Firemen work at the scene of the Shanghai Oil Refi nery fire.

Wan Gang, minister of science and technology, has already pledged that China will redouble its efforts to realize green growth by developing the technologies of "strategic importance".

Apart from new materials, biological medicine and information technology, Wan put wind power, solar energy, biomass and electric automobiles high on the government's list, which may gain substantial fiscal support during the coming five years.

"We will gradually let such strategic sectors sustain China's social and economic development in the long run," the minister said.