China Backing Away From Carbon Tax Start in 2013, Official Says

China will wait until after this year to introduce a tax on carbon, deferring to concern that economic growth might suffer, a government researcher said.

The nation eventually expects to introduce a levy of 5 yuan to 10 yuan (80 cents to $1.61) per ton of carbon, Jia Kang, head of research at the Ministry of Finance, said in Beijing yesterday. The tax, proposed in China’s latest five-year plan, was intended to apply to carbon emissions from fossil fuels, KPMG International said in a May 2011 report.

The carbon tax is “still in internal discussions,” as there is “obvious opposition,” Jia said without identifying the opponents.

The delay comes just as China, the world’s biggest emitter, steps up effort to reduce greenhouse gases and improve energy efficiency. The government will cut emissions and energy use per unit of gross domestic product by at least 3.7 percent in 2013, the National Development and Reform Commission said yesterday. The previous target was 3.5 percent.

China is proceeding with plans to set up seven pilot carbon trading programs in Beijing, Shanghai, Shenzhen, Guangdong, Tianjin, Chongqing and Hubei. The system will regulate 800 million to 1 billion tons of emissions by 2015, making it the world’s biggest cap-and-trade program after the one in Europe, according to Bloomberg New Energy Finance.

Senators Barbara Boxer, a Democrat from California, and Bernie Sanders, an independent from Vermont, unveiled a climate-change plan last month that would set an initial carbon fee of $20 a ton on polluters, including manufacturers and producers of oil and natural gas.

A carbon tax starting at 20 yuan was the minimum needed to help reduce emissions, according to 2009 paper from researchers at the Chinese Academy for Environmental Planning and the Energy Research Institute of the NDRC.

China first said it would implement an environmental tax in 2011, when the country released its 12th Five Year Plan, a list of policies to be carried out by 2015.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE