China studying carbon tax ideas: report

BEIJING Fri May 1, 2009 12:59am EDT

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BEIJING (Reuters) - Chinese state thinktank researchers will soon issue preliminary proposals for a carbon tax that may one day become part of the government's efforts to tame growing greenhouse gas emissions, experts told local media.

Su Ming, deputy director of an institute under China's Ministry of Finance, said the research on a carbon tax had been requested by that ministry and the Ministry of Environmental Protection and the proposal may be published "within a month," the National Business Daily reported on Thursday.

Su told the paper the proposal was part of a package of possible taxes on environmental damage under study. The others are taxes on sulphur dioxide and ammonia pollutants, as well as on waste water.

"At a time when calls for the globe to control emissions of carbon dioxide are growing louder...promotion of environmental taxes is much needed," Su said, according to the paper.

The carbon tax proposal, however, appears a long way from the prospect of implementation.

China has said it is up to rich countries to lead the way in cutting greenhouse gases fueling global warming. But its government has promoted a series of domestic initiatives it says are restraining the country's greenhouse gas emissions by factories, power plants and vehicles.

A carbon tax would potentially cover carbon dioxide emissions from fossil fuels and other sources that are accumulating in the atmosphere, trapping growing amounts of solar radiation that could dangerously overheat the planet.

China is mankind's biggest source of CO2, the main greenhouse gas, and produces about 80 percent of its electricity from coal-fired power stations, and is also the world's largest producer of power from coal.

Other governments have been pressing Beijing to sign up to targets for controlling and eventually cutting carbon dioxide emissions as part of a new global climate pact that negotiators hope to seal by the end of the year.

But Beijing says it and other developing countries should not be forced to accept mandatory emissions caps to solve a global warming problem caused by developed countries.

China's 1.3 billion people produce about 4 metric tons of greenhouse gases per head, compared with the U.S. average of about 20 metric tons per person.

China has introduced a tax on oil products and reformed pricing rules for such products to better reflect market forces.

But Jiang Kejun, director of the Energy Research Institute, a leading Chinese policy thinktank, said a carbon tax would not entirely replace the fuel tax.

"The fuel tax is to save energy and reduce (pollution) emissions, but the goal of introducing a carbon tax would be to reduce carbon (emissions)," the report cited him as saying.

He and Su Ming could not be contacted on Friday, a May Day public holiday in China.

(Reporting by Chris Buckley)

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