A Study of Tax Rate Design of Carbon Dioxide Tax in China
|School||Zhejiang University of Finance|
|Keywords||carbon dioxide tax rate Pigouvian tax double dividend environmental governance cost|
Since the 1970s’, as the human environment destruction and pollution have been more and more serious, the world pay more and more attention to of the environmental problems. Many countries through levying environment tax to keep economic individuals from polluting. Judging from the implementation effect, environment tax has been accepted by the world as an environment control tools in controlling the environment pollution and improving the environmental quality. And many foreign countries have established a relatively complete environment tax system. China also pays a great attention to environmental problems and makes the environment protection as a basic state policy, but it still does not have one real environment tax. It lacks experience of designing and administration of environmental tax. In recent years, global warming that caused by greenhouse gas emissions has become the focus of the environmental problems, in order to suppress greenhouse gas emissions, many countries have joined in and signed the Kyoto protocol, developed countries began to take on the mandatory cuts obligations in 2005, and developing countries also should take duties to cut carbon emissions in 2012.Because the harm that caused by greenhouse gases such as carbon dioxide is global, it needs all countries to participate in to reduce emissions in order to achieve the goal of environmental improvement. Facing the upcoming commitments to cutting carbon emissions, carbon tax, as a tool of reducing carbon dioxide emissions, was brought on the agenda. Because the harm that caused by greenhouse gases such as carbon dioxide is global, it needs all countries to participate in to reduce emissions in order to achieve the goal of environmental improvement. Facing the upcoming commitments to cutting carbon emissions, carbon tax, as a tool of reducing carbon dioxide emissions, was brought on the agenda. This paper based on this background, reviews the carbon tax practice in foreign countries which worth learning in the design of carbon tax in China. Through elaborating the carbon tax theory, a comparison between carbon tax and carbon emissions trade and a comparison between carbon tax and the current domestic tax which possess the characteristics of environmental protection, we explain the necessity of imposing a carbon tax. As a typical environment tax, theoretical basis of carbon tax includes externality theory, Pigouvian tax theory, public goods theory and double dividend theory. Externalities caused by environmental problems need a Pigouvian tax to achieve the optimal allocation of resources. In the optimal situation, Pigouvian tax rates should equal to the marginal cost of environmental damage, but the realistic world exists all kinds of twisted elements which will make Pigouvian tax rate deviated from the optimal. Pigouvian tax only stay in theory for the strain of real factor. This paper through an analysis of Pigouvian tax under the second best condition and then putting it in the background of double dividend theory we can finally make the actual alternative tax plan which can be used in practical. General environmental tax is mainly based on revenues which determine environmental protection expenditure. This kind of tax can only increase the fiscal revenue without effective reduction of emissions for considers less about who pays for their pollution. Direct pollution tax is based on stimulating environment taxes conforming to the polluter-pays principle, only the polluters are levied. This environmental tax applies to pollution emissions are more likely to measure. Pollution-product tax is also a kind of product tax based on stimulating environment tax; impose tax on product which may bring pollution. Through affecting the price of the product, this tax may force consumers to reduce the spending in pollution-product or choose clean-product instead. This method needs to consider the pollution control cost or environmental governance cost and determines the reasonable product tax rate based on the pollution product yields.The tax base of carbon tax is emissions of carbon dioxide, as the actual emissions is difficult to measure, we choose estimated amount of emissions as tax base. In order to ensure reduction effect and the accessibility of data, we suggest estimating the environmental governance cost. We could estimate a roughly range of environmental governance cost according to the global environment economists’estimate of the environmental governance cost and experience from foreign countries. We also estimate carbon emissions according to the consumption of fossil energy. Thus we can get a range of tax rate under Pigouvian tax principle. We optimize the tax rate refer to the neutral revenue principle. Considering the stock hazard, we suggest that a long-term goal of reduction of carbon emission. In this paper, we try to establish a carbon tax adjustment mechanism in which we can adjust the rate of tax according to the goals in different period. That means an effective initial tax rate is of the utter most.