China is casting about for ways to decrease their environmental pollution. Jia Kang a member of the 11th National Committee of the Chinese People's Political Consultative Conference (CPPCC), the top advisory body of the country, announced that time is ripe for the country to levy a tax on pollution emissions, according to the Peoples Daily Online.
According to Jia, the tax should be “levied on discharge of pollutants including waste water, waste gas and solid waste, together with carbon dioxide emission.”
The first trick is to get an accurate assessment on the amount of pollutants discharged from a plant. Then determine the cost of controlling the discharge of the pollutants. Finally, set the tax level so that it is cheaper to install the proper technology than to continue to discharge and still pay the tax. In some cases the proper business decision might be to close down the plant rather than installing very expensive technology or paying very high taxes. Market forces will make the decision.
A pollution fee or tax mechanism is not used in the U.S. The closest thing to it would be fines levied by either EPA or the states, depending on the legislation that controls it.
The second trick is to define who monitors the discharge of pollutants. It could be the plant itself would be self-monitoring. See Cassie Tighe’s Blog #4 “China to Log its Worst Polluters.” It would be similar to asking a company to monitor itself on a voluntary basis, much like what our current Administration likes to do. Of course the results would be a joke. The job could also be given to the local authorities, which will also be a joke. The best approach would be to properly arm SEPA and give them the authority and personnel to monitor, enforce and levy the tax.
2 comments:
Norm
I read an article (check my blog entry "Unit 2: Lesson 1") where they are implementing higher fines on industries polluting the water, but lifting fines on accidental pollution. I think this is setting up the scenario where industry just says ooops and gets away with polluting.
Angie
Hi Angie,
I went back and looked at your blog and the article it references. The specific part of the article is, as follows.
"The draft regulation also lifts the restriction of maximum fines to enterprises blamed for water pollution accidents, saying that fines will vary from 20 to 30 percent of the direct economic loss according to the severity of the incident."
Upon reading it, I did not come to the same conclusion that you did as to its interpretation. They are actually saying that they the regulation lifts the RESTRICTION OF MAXIMUM FINES. This seems to say that the can fine the enterprise as much as they want to, rather than a previous maximum.
The distinction between continuous and accidental discharges is important. A continuous discharge is due to the absence of permanently installed technology to properly sequester the pollutants. Accidental discharges occur when there is a process upset or the contol technology breaks down.
The emission tax gives permission to pollute if the enterprise is willing to pay the continuing tax. To make it effective for stopping the emissions, the tax would have to be sufficiently high. Fines for an accidental discharge is a mechanism for encouraging the enterprise to stay on its toes and to keep their equipment operating well.
For both taxes and fines to work in China, we keep getting back to the same old concerns. Will SEPA be given sufficient monitoring, enforcement, taxing and fining tools and what will be the role of the local authorities?
Norm
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