China considers taxing carbon emissions

Beijing—Facing public outrage over smog-choked cities and filthy rivers, China’s leaders are promising to clean up the country’s neglected environment—a pledge that sets up a clash with political pressures to keep economic growth strong.

An array of possible initiatives discussed by officials and state media ahead of this week’s meeting of China’s legislature include tightening water standards and taxing carbon emissions.

Pollution and public frustration about it are hardly new to China. But now, the ruling party is under pressure from entrepreneurs and professionals who are crucial to its development plans and want cleaner living conditions. Pressure intensified after this winter’s record-shattering smog in Beijing and other cities left office workers wheezing.

For industry, pollution controls could cause a costly upheaval after three decades of breakneck growth with little official concern about damage to China’s air, water and soil. Party leaders have given no timetable and have yet to make clear how far they are willing to go if such measures wipe out jobs or force factories and power plants to close.

“Economic interests are one of the biggest stumbling blocks to real progress on the environmental front,” said Melanie Hart, a specialist in Chinese energy and climate policy at the Center for American Progress in Washington, in an e-mail.

The party’s latest five-year development plan calls for cleaner, energy-efficient growth. Outgoing Premier Wen Jiabao last week promised more spending on renewable energy, pollution control and cleaning up lakes and rivers. The environment ministry is getting a 12 per cent budget increase. The Cabinet’s economic planning agency promised to change pricing and taxes for water, oil and other resources to curb waste and pollution.

The government is looking at updating laws on vehicle emissions, other air pollution and overall environmental protection, according to Fu Ying, a deputy foreign minister who is spokeswoman for the legislative meeting.

A cleaner environment is in line with the party’s ambition to transform China into a creator of technology and reduce reliance on manufacturing and heavy industry.

Chinese smog is so bad that officials in South Korean and Japan say pollutants are spreading to their countries. Last week, residents of Japan’s Kumamoto prefecture were told to stay indoors or wear masks as protection against airborne particles from China.

The bulk of the smog choking Chinese cities is belched out by commercial trucks, but authorities have put off tightening emissions standards.

Beijing has shut down antiquated power plants, steel mills and other facilities over the past decade to improve energy efficiency. Analysts say the easy gains have been made and further improvement will be tougher and more costly.

Some major Chinese companies have shifted with the political tide and embraced conservation.

The chairman of Sinopec, one of China’s three major state-owned oil companies, announced in February the company will spend several billion dollars in the next few years to upgrade its refineries and produce cleaner gasoline.

At lower levels, though, communist leaders need to restructure a tangle of economic and political incentives if they want their orders to be obeyed. Party leaders have promised to balance economic needs with environmental protection but could face resistance from industry and local officials whose promotions depend on meeting growth targets.

China’s first environmental law, a clean air act, was passed in 1987 but activists complain local authorities ignore controls if they conflict with business goals. They say filters on power plant smokestacks, and other environmental technology that might reduce output, are turned on only when inspectors from Beijing visit.