Beijing hopes carbon dioxide tax will help reduce pollution

Beijing will levy a tax on carbon dioxide emissions as part of new fiscal measures aimed at addressing the mainland's worsening pollution problem, a senior official at the Ministry of Finance said.

Jia Chen, head of the ministry's tax policy division, wrote in an article published on the ministry's website that the central government should improve its consumption tax regime to help achieve its energy-saving and emission control goals.

"We should proactively push forward the reform of taxation related to the environment, such as replacing the existing pollution discharge fee by an environmental protection tax," he wrote. "Carbon dioxide emissions should be subject to this tax."

Coal-fired-power producers have been paying pollution discharge fees on their emissions of sulphur gases for more than a decade, although Beijing has encouraged them to install equipment to collect such gases by giving them financial incentives. Carbon dioxide has so far not been subject to levies.

Jia's article came as Beijing stepped up the pressure on producers of polluting products to cut emissions, after the capital city was last month shrouded in dense smog from the worst air pollution in recent memory.

The State Council this month urged domestic oil refiners to accelerate the process of upgrading the quality of their motor fuel.

Jia said the environmental protection tax should be collected by local governments, without suggesting any timeframe.