The Research On China’s Carbon Tax Legislation

When formulating the Environmental Protection Tax Law of the People’s Republic of China(draft for approval),the draft for approval included carbon dioxide emission tax,and clearly included coal and coal products,coke oven gas,crude oil,gasoline,diesel,fuel oil,liquefied petroleum gas,natural gas,and other chemical fuels into the tax scope.However,the Environmental Protection Tax Law of the People’s Republic of China issued in 2016 failed to levy environmental protection tax on carbon dioxide due to the large disputes in various aspects.In this regard,the relevant national competent authorities still recognize the positive significance of the tax on carbon dioxide emissions,and clearly propose that the specific tax timing should be coordinated according to the needs of China’s ecological environment protection,the requirements of economic development and the strategic arrangements for international climate change negotiations.the Chinese government clearly studied the tax policies related to carbon emission reduction to play the role of tax in promoting the green and low-carbon development of market entities,and the carbon tax legislation is gradually moving towards reality.Carbon tax is a tax levied on fossil fuels according to their carbon content or carbon emissions for the purpose of reducing carbon dioxide emissions.There is a trend of change in the connotation and extension of carbon tax in the specific system operation,but it still focuses on the behavior regulation of carbon dioxide emissions.Carbon tax belongs to indirect tax,regulatory tax and environmental tax in legal nature.The theoretical basis of carbon tax mainly includes externality theory,double dividend theory,environmental justice theory and risk prevention theory.According to the externality theory,because the negative externalities generated by greenhouse gas emissions such as carbon dioxide have a huge impact on human production and life,it is necessary to introduce a carbon tax to set a price tag for greenhouse gases such as carbon dioxide,internalize the negative externalities generated by greenhouse gas emissions into the economic costs of enterprises or individuals,and then determine the extent of national restrictions on greenhouse gas emissions such as carbon dioxide,Achieve the minimum cost of ecological environment objectives.According to the double dividend theory,the imposition of carbon tax is not only conducive to controlling pollution,but also conducive to increasing government revenue to improve environmental quality or government financial structure.According to the theory of environmental justice,from the perspective of intragenerational equity,on the one hand,the cost of greenhouse gas emissions such as carbon dioxide will be internalized into the cost of enterprises by carbon tax,and then the market mechanism will guide enterprises to save energy and reduce emissions or use cleaner and low-carbon energy or products;On the other hand,through the financial allocation of carbon tax revenue,it can make up for the loss caused by the occupation of carbon dioxide resources and the loss of other people’s use opportunities.From the perspective of intergenerational equity,the introduction of carbon tax directly or indirectly guides the development of energy conservation and emission reduction industries and their technologies,promotes the mitigation and adaptation to climate change,and guides contemporary people to pay attention to the reasonable and moderate emission of greenhouse gases such as carbon dioxide.According to the risk prevention theory,due to the "uncertainty" and "certainty" of global warming,countries should take carbon tax and other measures based on the risk prevention principle to cope with the impact of climate change.Based on the theory of "taxability",the tax object or object of carbon tax meets the criteria of profitability,public welfare and fairness;The carbon tax not only conforms to the requirements of the Constitution for improving the ecological environment,but also conforms to the core of the Resolution of the Standing Committee of the National People’s Congress on Actively Responding to Climate Change.It is more reasonable than other administrative and economic control measures to deal with climate change,and has the possibility of parallel with the carbon emission trading system,which is legally taxable.Climate change has a huge impact on China,and the trend of climate warming in China will be further intensified in the future;In response to climate change,China is not only facing the pressure of the existing climate conditions,the existing energy structure and the existing cultivated land conditions that are difficult to adapt to climate change,but also the pressure of developed countries’ intention to require China and other developing countries to assume responsibilities and obligations beyond those agreed in the United Nations Framework Convention on Climate Change through the "carbon politics" order,It also faces the pressure that unilateral greenhouse gas emission reduction under the theme of "carbon leakage" and "carbon transfer" in the division of international trade will promote carbon leakage and weaken the international competitiveness of domestic industries.In this regard,China has demonstrated its determination to cope with climate change through practical actions by improving the top-level design of the response to climate change,preparing the national strategy for adaptation to climate change,actively mitigating climate change,actively adapting to climate change,and actively participating in global governance to cope with climate change.For China,carbon tax legislation is conducive to transmitting policy signals and promoting the common energy conservation and emission reduction of the whole society;It is also conducive to China’s active response to international climate governance negotiations and changes in international trade,and the realization of carbon tax as carbon pricing;It is more conducive to promoting the reform of China’s green tax system and better promoting green and low-carbon development through reform.From a historical perspective,China’s carbon tax legislation presents three stages:(1)From 2005 to 2012,it is mainly to promote energy conservation and emission reduction through environmental tax reform;(2)From 2013 to 2016,it is mainly to study the carbon tax system in line with China’s national conditions in the drafting of environmental protection tax law;(3)Since 2017,it has mainly taken into account the needs of ecological environment protection,economic development requirements and the strategic arrangement of international climate change negotiations to carry out carbon tax legislation.There are profound historical and political reasons why China’s environmental protection tax law does not include carbon dioxide as the scope of tax collection.First,the environmental protection tax law has a specific legislative background,which is based on the principle of "shifting the tax burden" to change the environmental protection fee into tax.China does not levy environmental protection fee on carbon dioxide;Second,the environmental protection tax law is positioned as an independent environmental tax,and its scope of taxation has been clearly defined as taxable pollutants.However,carbon dioxide is not clearly defined as a pollutant in China’s legal system;Third,the carbon tax involves environmental protection,development and reform,taxation,finance and other departments,as well as carbon emissions trading,international climate change negotiations and the impact on foreign trade.It is difficult to coordinate.In the process of formulating the environmental protection tax law,all relevant parties have not formed a unified opinion.Returning to China’s carbon tax legislation,the obstacles exposed in the process of drafting the environmental protection tax law need to be properly addressed:(1)the extent and acceptability of carbon tax legislation affecting economic growth,and the negative impact of carbon tax on China’s economy.Therefore,attention should be paid to the use of low tax rates and the introduction of tax returns,tax relief and other measures to offset the impact of carbon tax on economic growth when imposing carbon tax;(2)The impact of carbon tax legislation on the level of social welfare and whether the impact is acceptable.Carbon tax may push up prices and lead to rising costs of the whole society.Therefore,attention should be paid to the introduction of the principle of tax neutrality when imposing carbon tax,and the publicity and guidance of carbon tax legislation should be increased to strengthen the public’s awareness and recognition of carbon tax legislation;(3)The impact of carbon tax legislation on China’s existing system and whether the technology is feasible mainly include the relationship between carbon tax legislation and carbon emission trading legislation,existing tax legislation,tax sharing reform,energy price formation mechanism and carbon emission monitoring technology.Therefore,the relationship between carbon tax legislation and these existing systems should be comprehensively considered when imposing carbon tax.The value objectives of China’s carbon tax legislation are mainly divided into three levels: the carbon tax takes the reduction of carbon dioxide emissions as the direct objective,and the promotion of green and low-carbon development as the fundamental purpose.At the same time,considering that the carbon tax has the effect of improving the income inequality of residents and reducing the income gap between urban and rural areas,the adjustment of income distribution can be taken as its subsidiary purpose.The basic principles of China’s carbon tax legislation are still determined according to the three basic principles of the tax law,namely,the principle of tax legality,the principle of tax fairness and the principle of tax efficiency.The principle of tax legality requires that the National People’s Congress or its Standing Committee exercise the legislative power or authorize the State Council to legislate in accordance with the legislative law;The principle of tax fairness should consider that national legislation should treat all taxpayers equally and uniformly;We should also consider the living environment,income status and dependence on fossil energy of the taxpayer according to the principle of energy tax,and comprehensively adopt such measures as heavy tax,light tax,tax reduction and exemption,so that the substantive tax burden borne by different taxpayers is basically the same,so as to achieve the substantive fairness of carbon tax collection.The principle of tax efficiency requires to improve the economic efficiency and administrative efficiency of tax revenue.It is necessary to clarify the legislative purpose,tax object,tax basis and other tax elements of carbon tax,and reasonably allocate the collection and management power and simplify the collection and management procedures.The legislative model of China’s carbon tax should not be limited to the existing tax structure,which generally sets it as an independent tax or integrates it with environmental protection tax and resource tax,but should be based on the legislative purpose and background of the carbon tax,integrate the carbon tax into the national climate change legislative process,and authorize the State Council to carry out legislative pilot in specific regions.In the specific design of carbon tax legislation,the impact of carbon tax legislation on economic growth,industrial competitiveness,social welfare level and other aspects should be fully considered.At the same time,the impact of carbon tax legislation on China’s actual national conditions,such as the tax sharing system,price formation mechanism and environmental monitoring capacity constraints,should also be considered.It is appropriate to adopt a step-by-step implementation of the legislative strategy.That is,the first step is to add carbon tax provisions in the climate change legislation and authorize the State Council to formulate temporary regulations or regulations on carbon tax;The second step is for the State Council to carry out the carbon tax local legislation pilot in the way of tax reform,and timely summarize the experience of the carbon tax local pilot;The third step is for the State Council to comprehensively consider the international climate change governance negotiation strategy and relevant actual carbon tax regulations based on the local legislative pilot effect.The legal relationship of carbon tax can be defined as the debt relationship in public law at the abstract level,and the legal relationship of carbon tax can be divided into the debt relationship in entity and the power relationship in procedure at the legal and technical level.From the abstract level,the object of the carbon tax legal relationship on the debt of public law is the state power;The object of the carbon tax legal relationship above the tax entity is the tax formed according to the tax basis and tax rate;The object of the carbon tax legal relationship above the tax procedure is the tax behavior of the tax subject.The constitutive elements of the legal relationship of carbon tax include five parts: tax debtor,tax object,tax base,tax rate and special tax measures.The carbon tax takes the unit that emits carbon dioxide to the natural environment as the tax debtor;Take the act of emitting carbon dioxide into the natural environment as the object of taxation;Taking carbon dioxide emissions as the tax base,and referring to the carbon emission intensity of fossil fuels,the level of China’s economic and social development and carbon emission reduction technology,it is gradually included into the category of fossil fuels;Take the social cost of carbon as the basis for determining the tax rate,but when determining the carbon tax rate,pay attention to the policy objectives and the economic,social and political background,and gradually increase the carbon tax exchange rate according to the level of national economic and social development;Design special tax measures based on tax neutrality,which mainly include:(1)implementing tax relief and reducing the impact on domestic industries;(2)Recycle carbon tax revenue to reduce the impact on the economy;(3)Implement tax reform and reduce the total social tax burden;(4)And compensate the relevant interested parties.The carbon tax legislation also needs to formulate relevant procedural rules around taxpayers.In terms of procedural law,the assistance obligation of carbon tax payment should be clarified,including tax registration,tax declaration and tax cooperation and inspection;We should clarify the right relief of carbon tax taxpayers,and protect the legal rights of taxpayers by improving the tax administrative review system and adding the tax administrative public interest litigation system;The use restrictions of carbon tax should be clarified,and the carbon tax revenue should be included in the unified use and management of the national finance,specifically used for tax incentives in key industries,subsidies for low-income groups,research and development and promotion of climate change,energy efficiency improvement,research on new energy development and utilization and other foreign exchange projects.Although the current consumption tax,resource tax and vehicle and vessel tax have special provisions on fossil fuel consumption,their energy conservation and emission reduction functions are insufficient or may overlap with carbon tax.In order to promote carbon tax legislation in the context of addressing climate change,it is necessary to achieve legislative synergy based on the broad environmental tax system.As for the consumption tax,we should reasonably design the consumption tax on refined oil,give full play to the green guiding function of consumption tax,expand the scope of taxation on consumer goods of ecological destruction and luxury,and improve the tax preferential policies of consumption tax.For resource tax,we should establish the concept of ecological environment protection and clarify the legislative purpose of resource tax;Gradually expand the scope of resource tax collection to other mineral resources,water,forests,grasslands,mudflat and other natural resources;Reform the tax basis and tax rate standard of resource tax.For vehicle and vessel tax,the preferential tax policy of vehicle and vessel tax should be improved,and the vehicle and vessel tax for environmental protection should be reduced or exempted;For environmental tax,the scope of environmental protection tax should be optimized,the sewage treatment plant and domestic garbage treatment plant should be listed as the main categories of tax payment,and the differential quota tax rate should be implemented.As for the emission standards of greenhouse gases,China has not yet issued emission standards for greenhouse gases such as carbon dioxide.We should speed up the legislation of total emission control of greenhouse gases,solve the problem of upper law authorization of greenhouse gas emission standards,and accelerate the formulation of greenhouse gas emission standards;As for the administrative sanctions on greenhouse gas emissions,in theory,the administrative sanctions on greenhouse gas emissions are order-control regulatory measures,which are difficult to implement,and the existing legislative level is not high and the types are few.We should speed up the legislative process to deal with climate change,establish a clear and clear administrative sanctions mechanism on greenhouse gas emissions,introduce a third-party monitoring mechanism,and overcome the problem of government oversight.Although China’s carbon emissions trading legislation has gone through more than 10 years,there are still deficiencies such as imperfect system,opaque information,limited coverage,etc.Compared with carbon tax,it is simpler and more enforceable,more fair,and the price signal is clearer.In practice,carbon tax and carbon emissions trading can be parallel.In terms of legislative coordination,carbon emissions trading should be implemented first and then carbon tax should be imposed,achieving a unified carbon price coordination and discovery mechanism between carbon tax and carbon emissions trading,and achieving complementarity in terms of their respective institutional coverage.