China is contemplating levying carbon tax and raise the prices of petroleum for the next five years as an incentive to cut greenhouse gas emissions and help realise green targets, an expert said on Monday.
"We expect China will start to levy various taxes only if they are helpful in mitigating greenhouse emissions and developing a low-carbon economy," Jiang Kejun, a senior researcher with the Energy Research Institute under the National Development and Reform Commission was quoted as saying by state run China Daily on Monday.
"I think a carbon tax is likely to be levied during the 12th Five-year plan (2011-15) period," he said Jiang.
The National Development and Reform Commission is a Cabinet department responsible for the country's mid- and long-term development plan.
Apart from a carbon tax, Jiang said the government may begin to levy environmental and resource taxes.
Meanwhile, China will greatly boost subsidies to support low-carbon technology research and development.
At a weekend climate change forum organised by the China Centre for International Economic Exchanges, Jiang said that the government is serious about realising its target of cutting carbon intensity by 40-45 per cent by 2020 from 2005 levels and the government will implement "tougher measures" in the coming five years to realise the green goal.
Jiang said the taxation and fiscal incentives are just part of a portfolio of possible policy changes, which may turn into reality when China implements its low-carbon development pathway.
"We can possibly surpass the United States between 2020 to 2025 in terms of research and development investment," said Jiang adding that, "If this comes true, we can start to dream of becoming a low-carbon technology leader in the world.
However, Jiang is pessimistic about the coming 10 years.
China's total $59 billion investment in scientific research and development, Jiang said, "is only about one sixth of the US's total, or only equal to what the US invests in clean energy research."