China may soon get its very own tax on carbon emissions. That\u2019s the latest scuttlebutt from state-owned news service Xinhua, which noted that the levy would be part of a broader effort to improve the country\u2019s environment.<\/p>\n
Carbon tax, you say?<\/p>\n
It\u2019s easy to see why this move is attracting so much attention. China is the world\u2019s largest emitter of greenhouse gases. Yet the country has earned a reputation for bogging down international efforts to tackle climate change. A carbon tax looks like a big about-face. And it\u2019s more than anything Congress is proposing right now.<\/p>\n
Still, the details matter a lot here. Some experts think China\u2019s carbon tax may be too small and loophole-ridden to make much difference on emissions, at least in the beginning. On the other hand, a carbon tax also isn\u2019t the only thing China is doing to try to rein in its pollution. So here are a few things to consider:<\/p>\n
1) China\u2019s carbon tax is likely to be small at first. Chinese officials have offered hints about the size of the tax. Back in 2011, its Finance Ministry proposed a levy that would start at 10 yuan ($1.60) per ton of carbon and rise to 50 yuan ($8) per ton by 2020. (The Environment Ministry has pushed for a tax worth about twice that.)<\/p>\n
To put that in perspective, the proposal would initially add less than $1 to the price of a ton of coal, rising to about $4.40 by 2020. Coal in China currently trades for around $86.50 a ton. So it\u2019s a modest first step.<\/p>\n