Will China Tax Environmental Impact Before the U.S.?
Was the U.S. Senate's climate bill dead on arrival? Is it about to die? Is it nearly dead? Speculation ran rampant for awhile, but by now, everyone's pretty sure this year's verdict on climate legislation in the United States is "R.I.P."
In China, deliberations happen behind closed doors and are wrapped in study groups and committees of officials. So does its environmental tax bill exist? What does it look like? When might it emerge? It's hard to tell.
This is why it's big news when an official who studies taxation for the government says that a comprehensive system of environmental taxes is likely to be a part of China's next five-year plan, a document that will take effect in 2011 and will set the official five-year agenda for the country.
The headline: In an interview with state media, Su Ming of the Research Institute for Fiscal Science in the Chinese Ministry of Finance said "I personally think it’s relatively likely the environmental tax will be included in the 12th Five Year Plan." According to Su, China is likely to see its environmental tax implemented in 2013. I have translated the full interview here.
What would a Chinese environment tax look like? Su said it would include a carbon tax, and should be viewed as a system of taxes rather than an individual policy. The components, Su said, would be introduced gradually as the kinks are worked out.
Should we believe such a statement really portends important reform? After all, we've heard this sort of thing before, and Ella Chou describes some of the complexities at play. Regarding Su's statement, there are two points. One is that Su may simply be wrong about the political outcome of the 5-year plan, which is open to intense speculation. The fact that the central state-run media reported these comments, however, lends some credence to Su's opinion, and five-year plans do lay the groundwork for long-term changes. Another question is how quickly and how effectively these policies would be implemented. That's a story for another post.
There is, however, good reason to believe taxes meant to help the environment stand a good chance in China. According to Su, there is little opposition from local governments; They view the taxes as a way to increase revenue and promote development. Usually local opposition by officials who face competing demands is a serious barrier to environmental policy enforcement by central or local environmental authorities. Yet Jiangxi Province, a relatively poor south-eastern province, has already applied to host a pilot project. For Su, this indicates local authorities are likely to be on board.
For those keeping score, the race is on. And for climate advocates in the U.S., we can only wonder: Will the U.S. Congress get its act together soon, or will a grand opaque bureaucracy beat democratic debate to the punch? Time will only tell whether China or the United States is the first to implement meaningful measures that incorporate environmental costs into the economy.
Graham Webster
is a graduate student at Harvard and environment writer. He has worked as a journalist and consultant in Beijing and as an editor at the Center for American Progress.
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