Polluters’ tax breaks challenged in China | VailDaily.com

Polluters’ tax breaks challenged in China

BEIJING ” China’s premier pledged Friday to phase out tax breaks and discounts on land and electricity for highly polluting industries, saying that the country’s environmental situation was grim and required urgent action.

“More work on energy conservation and emissions reduction is urgently required to deal with global climate change,” Premier Wen Jiabao said. “Our country is a major coal producer and consumer and reducing polluting emissions is a responsibility we should bear.”

China is a major contributor to greenhouse gases, mainly carbon dioxide, which are blamed for damaging the ozone layer and causing global warming.

The country had been forecast to surpass the U.S. as the world’s top emitter of greenhouse gasses in 2010, but its sizzling economic growth has pushed the date forward, according to the head of the International Energy Agency. The prediction has refocused attention on China’s pollution policies and its contribution to global warming.

“We must clearly recognize that the situation the nation faces regarding energy conservation and emissions reduction is still quite grim,” Wen said at a meeting of other government leaders. “Last year, the nation did not meet its goals on reducing polluting emissions or on energy conservation, making our work to fulfill our five-year plan even more difficult.”

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China has committed itself to cutting 20 percent of its energy use per every unit of gross domestic product by 2010 but last year failed to meet the first phase of that goal ” a 4 percent reduction. Instead it fell by only 1.2 percent.

Emissions are also meant to fall by 10 percent by 2010. But last year sulfur dioxide emissions and chemical oxygen demand, a water pollution index, shot up 1.8 percent and 1.2 percent, respectively.

A transcript of Wen’s speech was posted to the government’s official Web site.

Wen said the government would “clean up and rectify preferential policies that give land and electricity discounts or tax breaks to energy intensive or highly polluting industries.”

He said China should create a system where polluters have to pay for their damage while enterprises that invest in clean energy are rewarded.

He called too for continued price reforms on natural gas, heating fuel and water to encourage energy conservation, without giving a timeframe for the price adjustments.

China is a signatory to the Kyoto Protocol on reducing greenhouse gases, but as a developing nation is exempt from its restrictions. Wen and Japanese Prime Minister Shinzo Abe signed an environmental agreement this month that calls for the countries to work on a successor to the Kyoto Protocol.

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