BIO: Prof. QIN Tianbao is the Luojia Professor of Law, and serves as the Director of the Research Institute of Environmental Law (RIEL) and the Associate Dean for the School of Law, Professor of China Institute of Boundary and Ocean Studies, Wuhan University, China; he is the Secretary-General of Chinese Society of Environment and Resources Law (CSERL); and a Lead Author and Review Expert of the Intergovernmental Platform on Biodiversity and Ecosystem Services (IPBES). He is a Legislative Expert for China’s Ministry of Environmental Protection and Ministry of Agriculture, and Hubei Provincial Parliament, and headed or participated in drafting of several major environmental bills. He is an Advisor for Chinese negotiations on biodiversity, ocean and climate change issues, and an Environmental Law Expert for several projects of International Financial Institutions in China.
KEYNOTE: Environmental taxation and big cities in China: A global vision
ABSTRACT: In China, environmental taxation, also known as eco taxation or green taxation is not clearly defined yet. However, it is well accepted by the government that the environmental taxation internalizes the social cost of ecological destruction and environmental pollution into the production cost, affects the producers’ and the consumers’ behaviors and the distribution of environmental resources through the market mechanism. Therefore, for the purpose of promoting eco-civilization and green development in China, among others, environmental taxation is strengthened and more frequently employed, especially in promotion the development of low-carbon cities.
Chinese government has set out its ambitious intensity reduction target; namely, by 2030 carbon emissions per unit of GDP would reduce by 60%-65% compared to 2005 which has been put it into national economic and social development plan as a binding goal. Since the cities gather major population and economy, the emissions in cities accounted for about 80% of the total (local emissions and indirect emissions caused by consumptions). Therefore, how to achieve “low carbon” cities has become the main content of actions when China addresses climate change with essence to reduce carbon emissions while developing the economy.
Chinese government has released many strategies, regulations and policies on low-carbon cities’ development. Correspondingly, China has established a basis system of environmental taxation with environmental protection tax and resources tax as the core body, with vehicle and vessel tax and other taxes, and tax reduction and exemption policy as supplementary body.
Specifically, from January 1st 2018 on, China imposes its Environmental Protection Tax (replacing “Pollution Discharge Fee, PDF”) and the new regime made distinction between light and heavy polluters, meaning that firms have more incentives to cut down on their emissions. And before that, China has started comprehensive its national resources tax reform since beginning of 2016. The main feature of the reform is to fully implement the ad valorem taxation method which is extended to most mineral products, such as crude oil, coal, natural gas, rare earth, molybdenum, and tungsten, though clay and sandstone will still be taxed by volume. Meanwhile, the Vehicles and Vessels Tax of 2012 reduced taxes on energy-saving and clean energy-powered vehicles, while imposing higher taxes on cars with big engines; what’s more, the State Council stated that buyers of new energy vehicles – fully electric, hybrid and fuel cell cars –would not have to pay the levy from September to the end of 2017. On the other hand, an environmental friendly and resources conserving firms could enjoy many tax reduction and exemption policies. For example, firms can enjoy tax benefits by comprehensively utilizing resources and purchasing equipments for environmental protection or energy saving and water saving.
Such a green tax system has been applied widely and comprehensively in industry, transportation, building, lifestyle and other key fields of low-carbon cities development, which eventually facilitate the adjustment of the economic structure and promote the transformation of the development mode of China. However, there are still different voices in this process. For instance, the fact that the environmental protection tax rates are decided at the provincial level could result in the migration of polluting agents to the more tax friendly regions of the country. Ad valorem taxation method has caused special burden on industries. And without gas tax, a person with a small car that frequently drives will discharge more air pollutant than a person with a large car that is driven infrequently. All these factors, if unidentified and unsolved properly, might undermine role of environmental taxation in promoting low-carbon cities in China.
In such circumstance, China shall revise and refine its environmental taxation system through learning by doing on one hand and successful experiences from other countries on the other hand. Perhaps, law and practice of China could contribute a lot to the globe in near future.