China looks at carbon tax

China's lead negotiator on climate change said Wednesday that the world's largest emitter is considering imposing a tax on carbon to reduce the use of dirty energy as its economy grows. Su Wei, on a visit to Washington, said that the fast-developing Asian power was looking at the impact of an outright tax on carbon and whether it would overlap with China's plans for a pilot scheme on carbon emissions trading. "I think that the carbon tax is one of the instruments that can be used in order to direct to low-carbon development," Su Wei told reporters on a visit to the World Resources Institute, a think-tank. Su, director general of the climate change department at China's powerful National Development and Reform Commission, said officials had not taken a final decision and were debating whether to use the term "carbon tax." "Whether we call it a carbon tax -- or environment tax or resource tax or even fuel tax -- we have lots of tax already. We need to carefully redesign the category and type," he said. Chinese state media said last week that a proposal submitted to the finance ministry would impose a tax of 10 yuan ($1.59) per ton of carbon within the next three years, targeting large users of coal, oil and natural gas. In a speech to the institute, Su said that China was also looking at a plan to put voluntary labels on products that are low-carbon "in order to try to give a clear signal to business and industry." China has surpassed the United States as the largest emitter of carbon, which many scientists say is contributing to the world's rising temperatures and extreme weather. China has pledged to reduce the intensity of its carbon emissions but it says it is not realistic to reduce its carbon emissions in net terms while lifting millions of its citizens out of poverty. The European Union, which has been at the forefront of action on climate change, has balked at imposing a direct tax on carbon and instead has a "cap and trade" system that restricts emissions and allows companies to trade in credits for action. Australia in November imposed a carbon tax, which at Aus$23 (US$23.70) per ton of carbon is much higher than China's proposal. Australia plans to transition to a trading system in 2015. Proposals for nationwide action on climate change have died in the US Senate. But California and East Coast states have launched their own trading initiatives, which Su is touring on his visit.