China to introduce carbon tax

China will proactively introduce a set of new taxation policies designed to preserve the environment, including a tax on carbon dioxide emissions, according to a senior official with the Ministry of Finance (MOF).

The government will collect the environmental protection tax instead of pollutant discharge fees, as well as levy a tax on carbon dioxide emissions, Jia Chen, head of the ministry's tax policy division, wrote in an article published on the MOF's website.

It will be the local taxation authority, rather than the environmental protection department, that will collect the taxes.

The government is also looking into the possibility of taxing energy-intensive products such as batteries, as well as luxury goods such as aircraft that are not used for public transportation, according to Jia.

To conserve natural resources, the government will push forward resource tax reforms by taxing coal based on prices instead of sales volume, as well as raising coal taxes. A resource tax will also be levied on water.

The article did not specify when the new measures will be implemented.

In 2010, MOF experts suggested levying a carbon tax in 2012 at 10 yuan per tonne of carbon dioxide, as well as recommended increasing the tax to 50 yuan per tonne by 2020.

China is among the world's largest emitters of greenhouse gas and has set goals for cutting emissions. The government has vowed to reduce carbon intensity, or the amount of carbon dioxide emitted per unit of economic output, by 40 to 45 percent by 2020 in comparison to 2005 levels.