China takes a lead

It is not yet official but according to a high-ranking official, the Chinese government is planning to impose a carbon tax to tackle emissions of carbon dioxide, sulphur oxide and wastewater. Aimed at slowing global warming, it is directed at coal and petrochemical products.

An environment tax and an energy tax are also on the anvil. The energy tax would mainly target the coal industry because the petroleum industry already pays consumption tax. When the energy tax is put into practice, companies will pay at least 40 yuan ($5.85) per tonne of carbon dioxide emitted.

Not so bad after all, for the biggest polluter in the world today! Seventy percent of China's energy comes from coal, the largest contributor to carbon emissions. China plans to build 500 coal-fired power plants in the next decade, at the rate of almost one a week

Going by its announcements, China is doing a good job of the tight-rope walk between development plans and growing emissions. A February analysis by HSBC Global Research in Hong Kong projects that nearly 40 percent of China’s proposed $586 billion stimulus plan is going toward public investment in renewable energy, low-carbon vehicles, high-speed rail, an advanced electric grid, efficiency improvements, and other water-treatment and pollution controls.

This makes China, according to a recent analysis, “the largest alternative energy producer in the world in terms of installed generating capacity.”

This massive stimulus plan will spend over 3 percent of China’s 2008 gross domestic product annually in 2009 and 2010 on green investments. China has adjusted its stimulus spending slightly since the HSBC analysis and trimmed spending on water treatment and environmental cleanup, but maintained huge investments in upgrading its power infrastructure, and more than doubled investment in technical upgrading and research and development.

Clear indications of how serious China is in ‘using this economic crisis to position itself to be the world leader in efficiency, green transportation, and clean and renewable energy’. China is a leading manufacturer of photovoltaic (solar) cells, second only to Japan, and is set to be the world’s leading manufacturer of wind turbines by the end of 2009.

Lessons there for all aspiring powers?