China’s Carbon Tax: Yes, It’s Real!

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By Flickr user Alexandra Moss

Alvin Lin and Yang Fuqiang of the Natural Resources Defense Council’s Beijing office recently published a piece on China’s carbon tax in China Dialogue.  The two NRDC experts published their thoughts in reaction to a controversial piece in the Wall Street Journal, which claimed that China’s plans to introduce a new carbon tax are not in earnest.

John Lee of the Journal posits that China’s leadership will prioritize economic growth over stringent limits on carbon emissions – thus their choice of a carbon tax versus a cap-and-trade system. Lee also argues that the costs of the carbon tax will eventually be passed on to end-users – mainly consumers of the goods distributed via foreign export. This could have the effect of disadvantaging foreign firms over state-owned enterprises, which, Lee claims, will be beneficiaries of special credits and other assistance to mitigate the economic impact of a carbon tax.

Lin and Fuqiang dispute this viewpoint in their article, which points out that during the 11th Five-Year Plan period (which covered the period 2005-2010), China saved approximately 1.5 billion tons of carbon emissions. With plans to reduce emissions even further during the 12th Five-Year Plan, it is not inconceivable that the proposed carbon tax could lead to additional reductions in carbon emissions in China, which could have a real and lasting impact on global warming, air pollution, and the continued need for newly constructed coal-fired power plants.

The authors of the China Dialogue article also point out that China may be suffering from a PR problem. Even though China has just announced carbon-trading pilot projects in several cities and provinces, such advances are rarely well-publicized. This problem is exacerbated by the paucity of media coverage for such carbon reduction schemes outside China’s borders.

You can read Lin and Fuqiang’s entire article over at China Dialogue to read more about why they believe the Chinese government is serious about taking action to reduce carbon emissions and why the carbon tax is “real”.