A case for introducing an explicit carbon price into China's export tax |
| |
| Authors: | Xin Wang Ji Feng Li Ya Xiong Zhang |
| |
| Institution: | 1. Institute for Sustainable Development and International Relations (IDDRI) , 27 rue Saint-Guillaume, 75337 , Paris Cedex 07 , France wangxin8111@yahoo.fr;3. Economic Forecasting Department , State Information Centre of China , Beijing , China |
| |
| Abstract: | In recent years, export value-added tax (VAT) refund rebate and export tax (EVRRET) measures have been adopted for energy-intensive products in China. They are proclaimed to be climate policy, yet there is no explicit and unique carbon cost set on export, and the implicit export carbon tax rates vary dramatically across sectors and over different periods. A method is provided to introduce an explicit and unique carbon cost into the current EVRRET. By setting a comparable carbon cost (US$20/tCO2 and US$30/tCO2) for eight major energy-intensive sectors to which the EVRRET is widely applied, it derives the corresponding ad valorem average rate for each sector. The introduction of a carbon cost into export VAT refund rebate policy would not increase the current export VAT refund rebate rate (except for the chemical sector), but would simply define a ceiling. However, the same introduction into the export tax policy would lead to an overall increase in sectoral export tax rates. In terms of competitiveness and World Trade Organisation concerns, the better option for introducing a carbon cost into Chinese exports would be through reforming export VAT refund rebate policy. |
| |
| Keywords: | border carbon measures carbon tax China embedded carbon export tax international trade |
|
|
