Carbon Tax Solution to Chinese Air Pollution

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Reports on air pollution in major Chinese cities have been headlining news networks for the past month.   With pollution levels literally off the charts, peaking at 755 on the Air Quality Index (scaled from 0-500), and with smog visible from space, the Chinese people are calling for action to curb emissions.   Air quality 30 times above the level deemed safe for humans has caused an increase in respiratory illnesses, especially among children.  It is apparent that China’s emission policies will have to change not just to slow the rising tide of global warming, but so its people can continue breathing.   China’s heavy reliance on coal to power their economic growth is considered to be a main cause of the air pollution crisis seen in Beijing and other major Chinese cities.

China is already very active in the renewable energy markets.  They are currently leading the world in installed wind capacity (77 GW) and they are a major producer of solar panels, but the nation’s enthusiasm towards cleaner renewable energy serves only to supplement the massive amount of coal-fired power consumed every year.  In 2012, the Chinese imported 234.3 million  and produced domestically 3.66 billion tons of coal, consuming nearly as much coal as the rest of the world combined.

China Energy

Xinhua reports that China’s Minister of Finance has announced a plan for a carbon tax to spur reduction in GHG emissions.  The details of the carbon tax plan have not yet been released, but previous reports indicated that it would be enacted by 2015.  Discussions of the plan stated that the tax might start at 10 yuan ($1.59) per ton of carbon and would rise over the next 5 years. Coal is currently selling at around $86 per ton in China so it is hard to tell how much of an effect this tax would have on consumption.  A carbon tax may prove to be a solution to reducing China’s emissions of GHGs and the amount of fine particulate matter that is choking its cities.

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