China to tax carbon by 2015
Michael Sainsbury, The Australian
7 January 2012
CHINA is planning a carbon tax on big energy consumers by 2015 in a development that has been seized on by the Gillard government as further evidence the rest of the world is acting to cut global greenhouse emissions.
But the mooted starting carbon price of $1.55 (10 yuan) from the world's biggest carbon-emitting economy has reignited business concern that Australia's $23-a-tonne starting price from July 1 is too high and will damage business competitiveness.
State-run Chinese media reported that proposals for a new environmental taxation system had already been submitted for review to the Ministry of Finance and were expected to be implemented before the end of the 2011-15 five-year plan.
Australian Climate Change Action advocates expressed cautious optimism about the Chinese reports - arguing that it showed Australia's carbon tax was in front of other international efforts - while critics said the low starting price showed the Australian price was too high.
carbon price compared with international schemes. He said the government's Jobs and Competitiveness Program would provide "substantial assistance" to Australian companies that were emissions-intensive and faced strong international competition.
Mr Combet's spokesman said widespread international action to tackle climate change was already under way in the world's major economies, including China.
At the UN climate change conference in Durban in South Africa last month, all major economies, including China and the US, had committed to take on legal obligations to reduce carbon pollution in a new international agreement to be negotiated by 2015.
China had adopted a target of reducing its carbon emissions per unit of GDP by 40 to 45 per cent below 2005 levels by 2020.
"In addition to investing billions of dollars in renewable energy projects, the Chinese government has been working on plans to pilot emissions trading schemes in key provinces and cities," Mr Combet's spokesman said.
China's moves to tackle climate change and its focus on market mechanisms gave the lie to opposition claims that the rest of the world was not acting to cut emissions, he added.
But opposition climate action spokesman Greg Hunt said the emerging details of the Chinese scheme revealed the extent of "Labor's con in suggesting that China is following Australia in having a carbon tax".
"As now detailed, the test market, which is extremely limited in size, has a price at $1.55 a tonne compared with Australians having to pay $23 and going higher.
"Quite clearly, the government is selling out Australian jobs to China as local companies are hit with one of, if not the most expensive, carbon taxes and which doesn't even reduce Australia's emissions," Mr Hunt said.
Su Ming, deputy director of Financial Science Research Institute, told the state-run Economic Information Daily that under the proposal, the tax rate would increase gradually.
Mr Su said the institute originally proposed the tax to take effect this year, but considering that economic growth may slow down due to the European crisis and government moves to deflate the country's property bubble, "2012 may not be good time".
"For the carbon tax, the energy industry might be given certain tax reductions at certain stages when their businesses are much affected," Mr Su said. "Companies which are actively adopting emissions reduction technology and recycling technology might be given preferential tax, too."
He said pollutants such as sulfur dioxide, COD (chemical oxygen demand) and nitrogen oxide would be the first to incur tax and, as conditions matured, other emissions would be included. The proposed tax would focus on big consumers of coal, crude oil and natural gas.
The Chinese deliberations follow the Gillard government's decision to impose a carbon tax of $23 a tonne from July 1 next year.
Most of China's major emitters are government-owned companies, which will make a carbon tax easy to collect, but it is likely to meet resistance from interest groups within the state-owned energy enterprise sector.
Additional reporting: Zhang Yufei
CHINA is planning a carbon tax on big energy consumers by 2015 in a development that has been seized on by the Gillard government as further evidence the rest of the world is acting to cut global greenhouse emissions.
But the mooted starting carbon price of $1.55 (10 yuan) from the world's biggest carbon-emitting economy has reignited business concern that Australia's $23-a-tonne starting price from July 1 is too high and will damage business competitiveness.
State-run Chinese media reported that proposals for a new environmental taxation system had already been submitted for review to the Ministry of Finance and were expected to be implemented before the end of the 2011-15 five-year plan.
Australian Climate Change Action advocates expressed cautious optimism about the Chinese reports - arguing that it showed Australia's carbon tax was in front of other international efforts - while critics said the low starting price showed the Australian price was too high.
carbon price compared with international schemes. He said the government's Jobs and Competitiveness Program would provide "substantial assistance" to Australian companies that were emissions-intensive and faced strong international competition.
Mr Combet's spokesman said widespread international action to tackle climate change was already under way in the world's major economies, including China.
At the UN climate change conference in Durban in South Africa last month, all major economies, including China and the US, had committed to take on legal obligations to reduce carbon pollution in a new international agreement to be negotiated by 2015.
China had adopted a target of reducing its carbon emissions per unit of GDP by 40 to 45 per cent below 2005 levels by 2020.
"In addition to investing billions of dollars in renewable energy projects, the Chinese government has been working on plans to pilot emissions trading schemes in key provinces and cities," Mr Combet's spokesman said.
China's moves to tackle climate change and its focus on market mechanisms gave the lie to opposition claims that the rest of the world was not acting to cut emissions, he added.
But opposition climate action spokesman Greg Hunt said the emerging details of the Chinese scheme revealed the extent of "Labor's con in suggesting that China is following Australia in having a carbon tax".
"As now detailed, the test market, which is extremely limited in size, has a price at $1.55 a tonne compared with Australians having to pay $23 and going higher.
"Quite clearly, the government is selling out Australian jobs to China as local companies are hit with one of, if not the most expensive, carbon taxes and which doesn't even reduce Australia's emissions," Mr Hunt said.
Su Ming, deputy director of Financial Science Research Institute, told the state-run Economic Information Daily that under the proposal, the tax rate would increase gradually.
Mr Su said the institute originally proposed the tax to take effect this year, but considering that economic growth may slow down due to the European crisis and government moves to deflate the country's property bubble, "2012 may not be good time".
"For the carbon tax, the energy industry might be given certain tax reductions at certain stages when their businesses are much affected," Mr Su said. "Companies which are actively adopting emissions reduction technology and recycling technology might be given preferential tax, too."
He said pollutants such as sulfur dioxide, COD (chemical oxygen demand) and nitrogen oxide would be the first to incur tax and, as conditions matured, other emissions would be included. The proposed tax would focus on big consumers of coal, crude oil and natural gas.
The Chinese deliberations follow the Gillard government's decision to impose a carbon tax of $23 a tonne from July 1 next year.
Most of China's major emitters are government-owned companies, which will make a carbon tax easy to collect, but it is likely to meet resistance from interest groups within the state-owned energy enterprise sector.
Additional reporting: Zhang Yufei
