Carbon tax the way to blue skies and financial stability

The purpose of taxes in Hong Kong is to collect revenue for public spending on the various needs of society. The purpose of taxes in other developed countries sometimes goes beyond mere public revenue to act as a financial tool to drive certain changes. For instance, a tax on plastic bags in certain European nations aims to cut the excessive use of these bags, to reduce their environmental impact and to change public behaviour.

Our government has been charging licence fees for vehicles based on the volume of the engine's cylinders. In the face of international obligations, climate change and a public outcry for cleaner air, it should consider charging a tax based on the amount of carbon dioxide a vehicle will generate. Adding a carbon tax to the annual renewal of vehicle licences would encourage the public to buy low-emission and fuel-efficient cars.

If such a tax is charged in a place where the market is large enough, it could even drive industries to speed up the development of more efficient and less polluting vehicles, as well as cleaner fuels.

A carbon tax also upholds the spirit of the polluter-pays principle, as it would target the affluent people most likely to buy gas-guzzlers, and would therefore not affect low-income groups. Revenues from the tax could be used to subsidise medical costs for the treatment of patients with respiratory illnesses caused by air pollution, as well as to support local academics in conducting research and development for cleaner fuels and engines.

Furthermore, the overseas automobile industry not only provides customers with information on a vehicle's fuel consumption and power output, but also on its carbon dioxide emission levels. I believe our government should learn from this good practice and require that such information be made available to the public.

The idea of a carbon tax is in line with the spirit of the Kyoto Protocol, which requires nations worldwide to reduce their greenhouse-gas emissions to combat the crisis of global warming and its devastating impact on human life and the world's economy.

A carbon tax may not generate as much revenue as the government's recently proposed, and suddenly dropped, goods and services tax. However, it would be in line with its long-term taxation and environmental policies, by achieving financial stability and a clean blue sky.