Author: WM

BC signs Climate Action Plan with California, Oregon and Washington

 
On October 28, 2013 the leaders of British Columbia, California, Oregon and Washington signed the Pacific Coast Action Plan on Climate and Energy committing their governments to a comprehensive and strategic alignment to combat climate change and promote clean energy. The region covered by the Action Plan has a combined population of 53 million people and a GDP of $2.8 trillion, which represents the world’s fifth largest economy.

Through the Action Plan, all four jurisdictions will account for the costs of carbon pollution and where feasible, link programs to create consistency and predictability across the region.  In addition, the Action Plan provides for the following actions:

  • harmonizing 2050 targets for greenhouse gas (GHG) reductions and developing mid-term targets needed to support long-term reduction goals;
  • cooperating with national and sub-national governments around the work to press for an international climate change agreement in 2015;
  • enlisting support for research on ocean acidification and taking action to combat it;
  • adopting and maintaining low carbon fuel standards in each jurisdiction;
  • taking action to expand the use of zero-emission vehicles, aiming for 10% of new vehicle purchases by 2016;
  • continue deployment of high-speed rail across the region;
  • supporting emerging markets and innovation for alternative fuels in commercial trucks, buses, rail, ports and marine transportation;
  • harmonizing standards to support energy efficiency on the way to “net zero” buildings;
  • supporting federal policy on regulating GHG emissions from power plants;
  • sponsoring pilot projects with local governments, state agencies and the West Coast Infrastructure Exchange to make infrastructure climate smart;
  • streamlining approval of renewable energy projects; and
  • supporting integration of the region’s electricity grids.

The Action Plan provides a much needed boost to regional and national efforts climate change policy efforts.

The Pacific Coast Collaborative was established in 2008 to address the unique and shared circumstances of the Pacific coastal areas and jurisdictions in North America by providing a formal framework for co-operative action, a forum for leadership and the sharing of information on best practices, and a common voice on issues facing coastal and Pacific jurisdictions.
 

Release of Latest IPPC Report Spurs Calls for Action from Business Leaders

 

On September 25, 2013 the Intergovernmental Panel on Climate Change (IPCC) released Climate Change 2013: the Physical Science Basis, the first part of its Fifth Assessment Report (AR5). Six years in the making, the 2,200 page report was developed by 209 lead authors, citing more than 9,000 scientific publications in their analysis of key physical and scientific aspects of the climate system and climate change.

The report confirms that human influence is the dominant cause of observed warming. Scientists now state with more certainty than ever before, that it is extremely likely (95% probability) that human activities, particularly combustion of fossil fuels and changes in land use, are responsible for the 0.85ºC increase in average global temperatures that has occurred since 1880.

There has been a reduction in the rate of atmospheric temperature increases over the past fifteen years which the IPCC attributes to the absorption by the oceans of a large amount of heat, and sequestering a third of the greenhouse gas emissions. This is by no means good news, since warmer waters expands leading to rising sea levels, sea temperatures also significantly influence climate patterns and an increasing concentration of greenhouse gases in ocean waters contributes to acidification with negative impact on aquatic ecosystems. The report concludes that “human influence has been detected in changes in the global water cycle, in reductions in snow and ice, in global mean sea level rise, and in changes in some climate extremes.”

The report lays out four different potential scenarios for global temperature rise over the course of the century, ranging from 0.3 ºC to 4.8ºC. In the immediate decades, all four scenarios follow a similar trajectory, showing a low sensitivity to curbing emissions in the short-term. But if current trends continue, the effects of cumulative emissions will be difficult to mitigate due to the long half-life of greenhouse gases and their continued impact on the climate long after emissions subside.

The AR5 is the first IPCC report to define a “carbon budget” – an estimate of the maximum amount of human caused emissions that can be released in the atmosphere before we experience warming greater than 2ºC – the indicative threshold beyond which extensive global environmental and socio-economic damage is expected. That carbon budget is 1,000 trillion tonnes of carbon dioxide equivalent (CO2e), of which approximately half has already been emitted. Based on carbon-intensive trajectories, this means that the world has just 30 years until it has used up its carbon budget. If we exceed this budget, the chance of staying within 2ºC of warming looks far less promising.

What does this mean for business? In short, climate change brings with it greater risks and investment challenges:

• More frequent extreme weather events: Higher temperatures and more extreme weather are among the most apparent business risks. At the World Economic Forum in 2013, financial experts named climate change as one of the top three business risks. From raging wildfires to severe flooding, extreme weather events can imperil operations throughout a company’s supply chain. Rising sea levels will also threaten shorelines. According to the IPCC, sea levels have likely risen nearly twice as fast as previously reported. More than 1 billion people worldwide, along with many financial centers, are located in low-lying coastal communities. According to the OECD, average flood losses in major cities around the world could exceed $52 billion per year by 2050, and possibly go as high as $1 trillion without additional protection. At the other end of the spectrum, some regions will be faced with greater water scarcity rather than flooding. In the Carbon Disclosure Project’s 2012 Global Water Report, 53% of respondent companies reported that they have experienced water-related detrimental impacts in the past 5 years (up from 38% in 2011), with costs as high as $200 million for some companies.

• Risks to energy infrastructure: Extreme weather also poses a threat to energy and electricity infrastructure by potentially disrupting production, delivery, and storage of energy. Many power sources depend on water and decreased water availability due to changing precipitation trends may threaten operations.

• Investment risks: Climate-related economic disruption also compounds risks to global investments. A 2011 Mercer study warned that climate change could increase investment-portfolio risk by 10 percent over the next two decades. The IPCC’s carbon budget may have implications for fossil fuel companies, which are traditionally among the higher grossing investments. Since their value is based on proven reserves, there is a risk of devaluation if a significant portion of the reserves are left untapped in order to keep within the carbon budget.

• Insurance risks: Extreme weather events are already having an impact on the insurance industry. As damage from extreme weather events increases, insurers are faced with either hiking rates or refusing to provide coverage in disaster-prone areas. Ultimately, increased costs will be passed onto businesses and consumers.

While climate change presents clear risks to business, smart responses can deliver economic benefits as well. In a 2010 report by the UN Global Compact, more than 86 percent of businesses named responding to climate change as an opportunity. This is reflected in the actions of many multinational corporations, which are already taking steps to reduce risks and lower their greenhouse gas emissions. Whether it is driving emission reductions throughout the supply chain, investing in renewable energy or phasing out the use of carbon intensive materials, companies are choosing to act.

Industry comments in response to the IPCC report highlight the urgent need for action for more, see ‘Experts React’. Nick Robins, head of the Climate Partnership at HSBC, commented that: “The IPCC report provides firmer foundations for policy action. For the world’s capital markets, climate change is an issue of strategic risk management … Our research shows that India, China, Indonesia, South Africa and Brazil are the G-20 nations that are most vulnerable to climate risks. We expect the succession of IPCC reports into 2014 to provide a renewed impetus to policy and business action through to the finalization of negotiations in December 2015.” Head of Swiss Re’s sustainability program in the Americas, Mark Way, also said: “When a body like the IPCC concludes that with 95% certainty mankind is causing climate change we would be foolish not to listen. And yet we are still not listening closely enough. The transition to a low carbon economy and a more climate-resilient society cannot be thought of as options, they are necessities.” Mindy Lubber, president of Ceres (a US-based organisation which presses for greater sustainability and environmental awareness in the business sector) summed it up nicely: “The IPCC report’s conclusion is unequivocal – climate change is happening and it’s disrupting all aspects of the global economy, including supply chains, commodity markets and the entire insurance industry. Business momentum is growing to innovate new strategies and products to manage climate risks and opportunities. But scaling these efforts to levels that will slow warming trends will require stronger carbon-reducing policies globally.”

The IPCC will release three more parts to the AR5 report in 2014: Impacts, Adaptation and Vulnerability; Mitigation of Climate Change; and a Synthesis Report. For more information on the current report, see IPCC Fifth Assessment Report: Climate Change 2013: The Physical Science Basis.

 

California ARB Fines Nine Companies for Late or Inadequate GHG Reporting

Nine companies have been fined by the California Air Resources Board (ARB) for violations of the state’s Mandatory Greenhouse Gas Reporting Rule (the Reporting Rule) which requires facilities, including those covered by California’s cap-and-trade regulation, to report their greenhouse gas (GHG) emissions annually. Adopted by ARB in 2007, the Reporting Rule requires facilities that emit more than 10,000 metric tons of carbon dioxide annually to report their emissions. About 600 facilities have been reporting their greenhouse gas emissions to ARB since 2008.  

Industrial facilities are required to report each April and utilities are required to do so each June. These reports are then checked for accuracy and verified by independent third parties with oversight by ARB staff.  The reporting compliance rate for 2012 was 97%. Nine companies have been fined for failure to supply complete information by the appropriate deadlines for either the reporting or verification stages. In addition to paying these fines, the violators must provide ARB with plans for complete and accurate data collection and reporting in the future. The companies fined include:

·        ExxonMobil Oil Corporation: $120,000

·        DG Fairhaven Power: $55,000

·        Vintage Production California: $35,000

·        Pacific Gas & Electric: $20,000

·        Veneco: $20,000

·        Cemex Construction Materials: $15,000

·        Lehigh Southwest Cement: $10,000

·        Lhoist North America of Arizona: $10,000

·        Tidelands Production: $10,000

With respect to GHG reporting, ARB Chairman Mary D. Nichols said that: “Accurate reporting of greenhouse gas emissions is the foundation of our efforts to reduce carbon pollution from the state’s energy and industrial sectors.  We will continue to vigorously enforce the mandatory reporting rule to ensure that every company follows all its requirements.”

Emissions reported by facility under the Reporting Rule can be viewed online

 

President Obama Announces Climate Action Plan

On June 25, 2013, President Obama made a long-awaited announcement for his administration’s Climate Action Plan.  The plan outlines a range of actions the Obama administration will take using existing authorities to reduce carbon pollution, increase energy efficiency, expand renewable and other low-carbon energy sources, and strengthen resilience to extreme weather and other climate impacts.  As part of the plan, the Environmental Protection Agency (EPA) has been directed to set standards by June 2015 to reduce carbon pollution from existing power plants.

 

President Obama’s Climate Action Plan focuses on the following key areas:

 

·        Regulating Greenhouse Gas Emissions – In lieu of any action by US Congress on setting an economy-wide price on carbon, President Obama is using his powers under the Clean Air Act to curb emissions from power plants, by far the largest unregulated source of US carbon emissions.  Companies are seeking regulatory certainty so many of them are prepared to work with the Obama administration on pragmatic approaches to cut GHG emissions and mitigate climate risks.  The Supreme Court ruled in 2007 that EPA has authority under the Clean Air Act to regulate greenhouse gases.  Carbon pollution standards for new power plants proposed by EPA in March 2012 have not yet been finalized. In his June 25 speech, President Obama announced a Presidential Memorandum directing the EPA “to work expeditiously to complete carbon pollution standards for both new and existing power plants.”

 

·        Energy Efficiency – The Department of Energy has been directed to build on efficiency standards for dishwashers, refrigerators, and other products that were set during President Obama’s first term.  President Obama set a goal of cumulatively reducing carbon dioxide emissions by 3 billion metric tons by 2030 through efficiency measures adopted in his first and second terms. The president also committed to build on heavy-duty vehicle fuel efficiency standards set during his first term with new standards past the 2018 model year.

 

·        Renewable Energy – In 2012, renewable energy was responsible for 12.7% of net U.S. electricity generation with hydroelectric generation contributing 7.9% and wind generation 2.9%.  As the fastest growing energy source in the US, President Obama reiterated his support to make renewable energy production on federal lands a top priority.   In particular, the President announced a series of executive decisions (i) directing the Department of the Interior to permit enough renewable projects on public lands by 2020 to power more than 6 million homes; (ii) to designate the first-ever hydropower project for priority permitting; and (iii) to set a new goal to install 100 megawatts of renewables on federally assisted housing by 2020. The President will also maintain a commitment to deploy renewables on military installations and will make up to $8 billion in loan guarantees available for a wide array of advanced fossil energy and efficiency projects to support investments in innovative technologies. 

 

·        Natural Gas – New drilling technologies such as hydraulic fracturing have significantly increased the amount of recoverable natural gas in the US. These advances are expected to keep the price of natural gas near historically low levels, thus altering energy economics and trends, and opening new opportunities to reduce greenhouse gas (GHG) emissions. To better leverage natural gas to reduce GHG emissions, the administration will develop an inter-agency methane strategy to further reduce emissions of this potent GHG.

 

·        Leading by Example – In his first term, President Obama set a goal to reduce federal GHG emissions by 24% by 2020. He also required agencies to enter into at least US $2 billion in performance-based contracts by the end of 2013 to finance energy projects with no upfront costs. In his climate plan, the President established a new goal for the federal government to consume 20% of its electricity from renewable energy sources by 2020 which is more than double its current goal of 7.5%.

 

·        Climate Resilience – The President wants federal agencies to support local investments in climate resilience and convene a task force of state, local, and tribal officials to advise on key actions the federal government can take to help strengthen communities. President Obama also wants to use recovery strategies from Hurricane Sandy to strengthen communities against future extreme weather and other climate impacts and update flood-risk reduction standards for all federally funded projects.

 

·        International Climate Change Leadership – President Obama promised to expand new and existing international initiatives with China, India and other major emitting countries. He also called for an end to US government support for public financing of new coal-fired powers plants overseas, except for the most efficient coal technology available in the world’s poorest countries, or facilities deploying carbon capture and sequestration technologies. A noteworthy  initiative introduced by the President was a direction given to his administration to launch negotiations toward global free trade in environmental goods and services, including clean energy technology “to help more countries skip past the dirty phase of development and join a global low-carbon economy”.

 

Eileen Claussen, President of the Center for Climate and Energy Solutions, commented that President Obama is laying out a credible and comprehensive strategy to strengthen the US response to climate change. In particular, President Obama’s plan recognizes that the costs of climate change are real and rising; to minimize them, the US must both cut its carbon output and strengthen its climate resilience. These policy initiatives are an important first step, but it will require continued leadership to translate the plan’s good intentions into concrete policy.

 

 

Study shows that most Companies get GHG Reporting Wrong

 
A study released by the Environmental Investment Organisation (EIO) in April 2013 shows that most of the world’s largest companies do not report their greenhouse gas (GHG) emissions fully or correctly and do not have the data independently verified.  Based on the latest publicly available data, which for most companies was from 2011, the Environmental Tracking (ET) Global 800 Ranking Report found that only 37% of the world’s 800 largest companies disclosed complete data and correctly adopted the basic principles of emissions reporting.  Only 21% had their data externally verified and only one firm, German chemicals producer BASF, reported emissions across its entire value chain – from business travel and transportation to distribution and investments.  This transparency enabled BASF to achieve the number one ranking among all companies. In addition to BASF, the best companies at reporting emissions were telecoms firms such as Canada’s BCE, Swisscom, Singapore Telecom, Spain’s Telefonica, BT Group and Deutsche Telekom.  The bottom companies, with no publicly disclosed emissions data, consisted mainly of Russian and US utilities and oil and gas companies including Phillips 66, Lukoil, Edison International and First Energy.

The report’s key findings include the following:

BASF came out on top, disclosing 15 Scope 3 Categories, with a combined Scope 1, 2 & 3 emissions intensity of 932.74 tCO2e/$M turnover.

US based First Energy came last, with no public data and an inferred combined Scope 1, 2 & 3 emissions intensity of 10,342.03 tCO2e/$M turnover.

63% of companies report incomplete data or no data at all, indicating the scale of the GHG reporting challenge.

Europe leads the world on all disclosure metrics: 35% of companies report complete and independently verified data. This compares to 11% for the BRICS (Brazil, Russia, India, China and South Africa), the lowest of any region.

In total, only 21% of the ET Global 800 companies report public, complete and independently verified data, as defined by the ET Global Carbon Ranking Methodology.

Italy and Spain rank joint highest in terms of disclosure and verification with 62% of companies reporting complete data and a further 54% having their data verified.

33% of companies within the ET Global 800 report one or more Scope 3 categories. However, only 2%, report 5 or more Scope 3 categories.

Companies are under increasing pressure from the public and policymakers to report the environmental impacts of their daily business activities.  While some companies are starting to measure and disclose environmental performance in their annual reports, the lack of utilizing transparent and internationally accepted standards like ISO 14064-1 and ISO 14021 means that both reporting formats and content vary widely and remain toothless tigers.

ISO 14021



ISO 14021 is the acronym used to refer to an ISO Standard specifying the requirements for environmental labels and declarations defined as “Self-declared environmental claims”. This standard provides guidance on the terminology, symbols, testing and verification methodologies that an organization should use for self-declaration of the environmental aspects of its products and services.



	


	







	

		
		
California Governor Gives Green Light to Link Carbon Market to Quebec
	


	
	
	

		
 

In a letter dated April 8, 2013 to the state Air Resources Board (ARB), California Governor Jerry Brown approved a proposal to link the California’s cap-and-trade system with Quebec’s program, paving the way for companies to trade carbon permits across borders.


In the April 8 letter, Governor Brown found that the request from the ARB met all necessary state requirements. The ARB, which has been working with Quebec for several years to develop complementary systems, will consider changes to its cap-and-trade program on April 19 that will allow it to link with Quebec.  Quebec is the first region that California has proposed to partner with, which will lay the foundation for a broader system that other governments may join.


ARB staff has said a link with Quebec would expand investments in low-carbon technologies, many of which are being developed in California, and improve market liquidity for carbon allowances by increasing the pool of both permits and companies trading them. According to the Governor’s letter, California will not link systems with Quebec until January 1, 2014.  In the meantime, the ARB and Quebec’s Ministry of Environment will test their auction platforms and trading systems to ensure they are compatible.  Governor Brown has asked the ARB to file a report with his office by November 1, 2013 outlining how the ARB will review and take public comment on changes to a linked program and whether there are any impediments to linkage occurring on January 1, 2014.


Quebec plans to reduce emissions to 20 percent below 1990 levels by 2020 with its cap-and-trade program, which applies to about 75 companies in the province. Under California’s program, carbon emissions from power generators, oil refineries and other industrial plants will be capped and then gradually reduced to 1990 levels by 2020. The system will eventually regulate 85 percent of the greenhouse gases released in California.


Regulators in both California and Quebec are issuing carbon allowances through a combination of free allocations and auctions, each permitting the release of 1 metric ton. Companies must turn in allowances to cover their emissions, and those with more allowances than they need, can sell or trade the excess.




 



	


	





	

		
		
European Commission Launches Green Products Initiative
	


	
	
	

		
 

The European Commission is proposing EU-wide methods to measure the environmental performance of products and organisations, and encouraging Member States and the private sector to take them up.


Currently, companies wanting to highlight the environmental performance of their products face numerous obstacles including the need to choose between several methods promoted by governments and private initiatives. As a result, these companies may be forced to pay multiple costs for providing environmental information and consumers are faced with confusion resulting from excessive labelling that makes products difficult to compare.


For example, a company wishing to market its product as a green product in France, UK and Switzerland would need to apply different schemes in order to compete based on environmental performance in the different national markets. In France, it would need to carry out an environmental assessment in line with the French method (BP X30-323); in the UK, it would need to apply the PAS 2050 or the WRI GHG Protocol; and in Switzerland, it would need to apply the Swiss approach which is currently under development.


According to the latest Eurobarometer on Green Products, 48 % of European consumers are confused by the stream of environmental information they receive, which affects their readiness to make green purchases.  A number of industrial groups have called for a pan-European approach built on EU-wide science-based assessments and Life Cycle Analysis.  This is because of concerns that multiple initiatives at Member State level would run contrary to Single Market principles, confusing consumers and increasing costs for industry.


To address these problems, the European Commission has launched the Single Market for Green Products initiative, which proposes the following actions:


    

  • establishing two methods to measure environmental performance throughout the lifecycle – the Product Environmental Footprint (PEF) and the Organisation Environmental Footprint (OEF);
    • 

  • recommending the use of these methods to Member States, companies, private organisations and the financial community through a Commission Recommendation;
    • 

  • announcing a three-year testing period to develop product- and sector-specific rules through a multi-stakeholder process;
    • 

  • providing principles for communicating environmental performance such as transparency, reliability, completeness, comparability and clarity; and
    • 

  • supporting international efforts towards more coordination in methodological development and data availability.
    • 



The three-year testing period will be launched soon. An open call for volunteers will be published by the Commission on the Product Environmental Footprint and the Organisation Environmental Footprint sites, inviting companies, industrial and stakeholder organisations in the EU and beyond to participate in the development of product-group specific and sector-specific rules. On these sites, some preliminary information is already available about the objectives and expected timing of the test. For more information, please see this link.




 



	


	





	

		
		
Update on China: China Steps into Leadership Role as it takes Action on Climate Change
	


	
	
	

		
 

In his first comments as China’s prime minister, Li Keqiang recently laid out a vision of a more equitable society in which environmental protection trumps unbridled growth and government officials put the people’s welfare before their own financial interests.  While the Prime Minister was short on specifics, his comments represent an encouraging acknowledgment of some of the pressing issues facing China.


Traditionally, China has been used as a carbon scapegoat and excuse for inaction by countries such as Canada and the U.S., whose per capita emissions are much higher.  However the tables are turning with China beginning to take a leadership role in addressing climate change.  China’s emergence as a climate leader means that Canada and other countries can no longer point their fingers at China as an excuse for not taking action to reduce their own greenhouse gas emissions.


China to roll out Cap & Trade in 2013


As the world’s largest emitter of carbon dioxide, China is preparing to gradually roll out cap-and-trade pilot programs in seven major cities and provinces starting in 2013.  This initiative is part of a larger goal to reduce carbon intensity – or the amount of carbon dioxide emitted per unit of economic output – by 40% to 45% below 2005 levels by 2020.


In November 2011, the Chinese government decided to implement cap-and-trade pilots in two provinces and five cities (including Shanghai, Beijing and Shenzhen) beginning in 2013 with the final goal of implementing a nationwide exchange program by 2016.  In less than two years, officials have designed and started to implement seven trading trials that cover around one-third of China’s gross domestic product and one-fifth of its energy use.  If successful, the schemes could demonstrate that an emissions trading system will be an effective way for China to manage its greenhouse gas emissions.  In addition, China’s activities may spur policy makers in other countries such as the US to act.


Bloomberg New Energy Finance previously estimated that the regional pilots would cumulatively cover 800 million to 1 billion tonnes of emissions in China by 2015, meaning that the market would become the world’s second largest after the European Union.  It has been reported that at the beginning, regional and city-wide markets will remain separate with unique rules and criteria. For example, some of the markets will cover factories and industrial operations exclusively, while others will focus on power generation or non-industrial sectors.


The first trades took place in September 2012 in Guangdong province, when four cement-manufacturing companies invested several million dollars to acquire carbon pollution permits (allowances). The Guangdong scheme is expected to cover more than 800 companies that each emit more than 20,000 tonnes of carbon dioxide a year across nine industries, including the energy-intensive steel and power sectors.  These firms account for more than 40% of the power used in the province.  The Guangdong carbon market alone will regulate some 277 million tonnes of CO2 emissions by 2015.


China plans to open six further regional emissions-trading schemes in 2013, in the province of Hubei and in the municipalities of Beijing, Tianjin, Shanghai, Chongqing and Shenzhen.  It plans to expand and link them until they form a nationwide scheme by the end of the decade. A nationwide scheme could then link to international markets.


Until now, China’s experience with carbon trading has been limited to the Clean Development Mechanism under the Kyoto Protocol.  While China’s political system could let a carbon market grow faster than anywhere else because changes can be implemented quickly, the carbon market faces challenges in China.  In particular, China needs to develop and enforce proper legislation and regulations to measure, report and verify carbon emissions from industrial sites.  It also needs to build an effective framework to oversee the reporting and trading of carbon credits.


At this stage, the most urgent issue that needs to be addressed is how China collects and analyzes data on carbon emissions.  The credibility of China’s statistics on energy use and carbon emissions has been questioned partly because of the large discrepancies between numbers calculated using top-down data and numbers calculated using bottom-up data.  Without accurate numbers, the first transaction of the Guangdong trading scheme was based on expected future carbon emissions, rather than historical data.  Improved statistical methodology and political action will be required to boost the reliability of carbon emissions data in China.  China will also need specific laws to ensure transparent reporting and strong enforcement to prevent fraudulent or misleading claims about carbon emissions.


Chinese Carbon Tax on the Horizon 


On the climate front, the Chinese government appears to be on the verge of taking a critical step which has been demonized by politicians in Canada and the USA – that is, implementing a carbon tax.  Although the carbon tax is expected to be modest, China plans to also increase coal taxes.


According to Jia Chen, head of the tax policy division of China’s Ministry of Finance (MOF), China will proactively introduce a set of new taxation policies designed to preserve the environment, including a tax on carbon emissions.  In an article published on the MOF web site in February 2013, Jia wrote that the government will collect an environmental protection tax instead of pollutant discharge fees, as well as levy a tax on carbon emissions.  The local taxation authority will collect the taxes, rather than the environmental protection department.  The article did not specify the level of carbon tax or when the new measures will be implemented.  In 2010, MOF experts suggested levying a carbon tax in 2012 at 10 yuan per tonne of carbon dioxide, as well as recommended increasing the tax to 50 yuan per tonne by 2020.  These prices are far below the 500 yuan (US $80) per tonne that some experts have suggested would be needed to achieve climate stability.


It is not anticipated that China’s plan will have a significant impact on global climate change, although the tax may have some beneficial impact within China itself, where air pollution is a serious problem.  A paper from the Chinese Academy for Environmental Planning suggests that a small tax could still raise revenue and provide an incentive to reduce emissions, thus bolstering China’s renewable energy industry.


To conserve natural resources, the government will push forward resource tax reforms by taxing coal based on prices instead of sales volume, as well as raising coal taxes.  A resource tax will also be levied on water.  In addition, the government is also looking into the possibility of taxing energy intensive products such as batteries, as well as luxury goods such as aircraft which are not used for public transportation.