An article by Karl Wilson, China Daily News.
With China’s toxic air pollution already having a serious impact on the economy, the country is moving toward implementing a tax on carbon emissions. But finding a solution to the problem of emissions will bring its own economic consequences.
Although a specific time frame has not been set, analysts expect a carbon tax will come into effect sometime between 2020 and 2025 and is likely to cost industry and consumers billions of dollars.
According to data from HSBC’s Global Research, the tax could cost industry as much as $14 billion to $74 billion a year, with the impact on consumers unknown.
Yet despite the costs, analysts believe China will still push ahead with the tax.
Says an analyst who does not want to be named: “China is in a perfect position to make it work, as the State owns most of the major polluters.”
In Australia, the introduction of a carbon tax in 2012 has not only been politically divisive, it has split communities and saw the Labor party thrown out of office at the elections last September.
This spurred the new Conservative government to make scrapping the carbon tax a key proposal in its election campaign.
Meanwhile, the government has estimated the controversial tax will cost the domestic economy in excess of A$9 billion ($8 billion) this year alone.
In China, a carbon tax will impact heavily on a number of key sectors, according to Chan Wai-shin, climate change strategist with HSBC in Hong Kong.
He said in a report that the cost to the fuel production sector could be nearly 40 billion yuan ($6.5 billion), manufacturing 32 billion yuan and the transport sector 8 billion yuan.
Chan said the Chinese government is dealing with the problem by “prioritizing clean air and safe drinking water, as well as dealing with environmental pollution with an iron fist”.
Philip Adams, an economics professor at Monash University in Melbourne, says curbing greenhouse emissions “will come at a price”.
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