China State Council Poses “Green Tax” To Fight Air Pollution

Published on Author norwoodkellyd18

When I was in high school, a girl on my sailing team was from Beijing. When I asked her about why she liked East Hampton, she said, ”I like that I can see the sun.” Despite attempts by Chinese officials to improve urban air quality, it still remains almost unbearable. Even in 1997, the World Bank noted that “ambient concentrations of particulates and sulfur dioxide in many Chinese cities are among the highest in the world and are significantly above World Health Organization guidelines and Chinese air quality standards” (Brajer, Mead 2004). China’s poor air quality contributes to the deaths of nearly 1.6 million people in China every year (Rohde 2015). These deaths are the result of daily inhalation of airborne particles about 2.5 microns in diameter leading to asthma, strokes and lung cancer (Levin 2015).

China is notably the world’s largest producer of coal, “the worst fossil fuel for both local and global pollutant emissions”. From 1980 to 1997, coal supplied China with 70-76% of its commercial energy (Nielsen 2007). At the beginning of China’s economic growth in the late 1970s, China attempted to implement an environmental protection system in order to keep the pollution caused by rapid industrialization at bay. In actual practice, this systems guidelines are rarely followed (Shaw 2010). In 2014, Li Keqiang, China’s Prime Minister, declared a “war” on air pollution (The Economist 2015).
In November of last year, China’s State Council whipped up a draft law that proposes “green” taxes on pollutants in water, air, solid waste and noise in order to hold companies more accountable for their waste and encourage them to go the extra mile in order to protect the environment. This will be a great improvement from the current system of pollution fees that was instituted in 1982. This system had fees that were not compulsory and were uncollected. Other critics of the system say that it was unclear where the revenue from the fees were allocated. This new law would greatly impact on China’s heaviest polluting industries like steel, concrete, coal and chemicals by increasing their costs by about 2-5% (Zhang 2015). China’s hopefuls say that the implementation of this tax will be beneficial to both the environment and economy, funding projects in both central and local governments, however, this law will be pending until an upswing in the overall Chinese economy.

7 Responses to China State Council Poses “Green Tax” To Fight Air Pollution

  1. Lots of content so a good starting point for discussion. Can we break this down into separate topics? Let’s stick to air pollution; I’ve added water pollution to the blog topic list.
    • what metrics do we have for pollution in China? do they move together, or do some get worse while others improve?
    • what are the narrowly “economic” costs of pollution? how do these vary across types of pollution?
    • if pollution is an issue, what should be “the” priority?
    • if we can settle on priorities, what should policy look like?
    • as such policies politically feasible? if not, why / can that be changed?
    == the above could easily constitute an entire term of material!! as per the environmental studies major, it would combine biology, public health, chemistry, engineering/technology studies, economics and political science ==

  2. This is a perfect example of a negative externality–an economic action by one party that negatively effects another. Economic development in China is a generally good thing. However, economic growth and opportunity for workers comes at a cost–the lives of over 1.5 million.

    In my environmental econ class, we have talked at length about the benefits of taxation and how it limits pollution. Without taxation for pollution, producers simply produce at the equilibrium point where supply equals demand. But with taxation, the costs associated with pollution increase, driving the supply down and creating a new equilibrium where pollution is lower. Although taxation causes deadweight losses and is not economically ideal, we have to think about the quality of life in China–there is more to well being than economic well being.

    • One challenge with taxing pollution is that you have to measure pollution. Local government officials may be simultaneously local business executives or co-owners, and in any case evaluated on how well their town/city/county is doing.

      There are some nice studies about this, for example in one province the badly polluting factories tended to be located right next to the adjacent province, downwind and downriver from most of the population. The factories remained highly polluting but officials did improve the environment for their constituents!! More encouraging, there are also case studies of local activism leading to action. The challenge with case studies is that it’s hard to know how general they are.

  3. The metrics for air pollution are tricky. At first, it seemed simple to track the amount of pollution, but as I researched the topic, I found the big problem that is present. Scientists can isolate and determine the levels of each chemical in the air. However, they would have difficulty measuring the interactions of the chemicals. “The single chemical approach is not applicable when the components affect each others response. Such combined effects may be additive or there may be interactions,” states the Scientific Committee on Health and Environmental Risks, an independent scientific committee that advises the European Commission.

    Chemical composition of the air could vary, but this does not necessarily indicate the effects and severity of the pollution. For example, total chemical levels could decrease, leading one to believe pollution has decreased, when in reality it has not. If certain chemicals become less present, but a more harmful or reactive chemical becomes more present, the pollution could actually be in a worse state.

  4. I found it interesting that some critics are skeptical of the new plan to reduce pollution due to the government’s role. Perhaps to make up for past failures to enforce laws at the local level, this law restricts use of coal at the residential level rather than the industry level. This makes me wonder if an industry limit would be more effective. Though any reduction of coal will be positive for overall air quality in China, as it is the largest source of air pollution and is a major contributor to the current red alert China has issued. While intentions are positive, there is no timetable in place as to when lower emissions will be achieved. In addition, there are currently no punishments in place for company’s with higher pollutants.

  5. It is true that the air pollution in China is serious and damaging to people’s health, but it was not only caused by the non-stop factories but also the monsoon climate. For example, I only go back to China in summer and it is the season when China has the least air pollution. A project supported by NASA ACMAP proved it. “The air pollution is usually the worst in winter over East and South Asia and is getting worse in recent years. Such problem needs to be investigated in the context of changing meteorology”.


  6. From an economical view, I would like to say “Green Tax” is definitely a good thing to do for Chinese government. First off, there are always on going debate on pollutions that comes with the development for developing countries. As one of the largest and fastest growing country in the world, China cannot stop itself from developing. However, imposing green tax helps not only reducing the companies pollution, also increase taxes, in this way a increase in GDP.