March 12 China is reconsidering plans for a carbon tax as local air pollution trumps concerns over climate change and some rich nations back away from imposing a tax on greenhouse gas emissions, a top official said.
Premier Li Keqiang last week declared war on pollution, which is expected to speed up the process of turning China's limited environmental levy into a full-blown tax targeting the nation's major polluters.
But the all-out efforts to combat China's disastrous pollution levels might get in the way of plans to tax carbon dioxide emissions in a bid to stunt the rapid growth of greenhouse gas emissions, Zhu Guangyao, the vice environment minister, said.
"We have to reflect the requests of the majority through many consultation rounds," he told the Beijing Morning Post from the sidelines of China's annual parliamentary sessions.
A carbon tax is increasingly controversial among lawmakers, said Zhu, adding that an environment tax would be easier to push through without carbon in the mix.
The carbon and air pollution taxes would target mostly the same sources, and in difficult economic times China is wary of hitting companies with too many costly regulations.
Zhu also referred to the fact that Australia, under a new conservative government, is trying to abolish its carbon tax, while a price on carbon has been blocked in the United States.
China's Ministry of Environment currently collects a modest levy on air pollution, waste water and solid waste. As China's environmental problems have caused large-scale public anger the past year, the ruling Communist Party wants to ramp up taxation efforts.
The Ministry of Finance and the National Development and Reform Commission have both said a tax on carbon emissions might be implemented in addition to China's planned emissions trading scheme, its main policy to combat climate change, although studies are still being carried out on how it would work. (Reporting by Kathy Chen in BEIJING and Stian Reklev in ULAN BATOR; Editing by Jeremy Laurence)