Carbon tax in China...

Refresher: The carbon tax is among several market-based instruments that have the potential to spur incentives to develop and deploy carbon-reducing measures to mitigate climate change. Price increases on carbon emitting technologies can stimulate conservation measures, energy efficient investments, fuel and product switching and changes in the economy’s production and consumption structures.

While I have great hopes for China's rise in the 21st century, I am also somewhat dubious about their air pollution and environmental status. China`s economy is growing rapidly and this growth suggests that it will be one of the biggest economic giants of the world by 2030. With tremendous economic productivity, technological innovation and population growth, the country has numerous competitive advantages. However, air pollution and environmental degradation will do the country some severe harm and have multiple health implications. Air pollution for one can impede industrial productivity in the sub-urban areas due to health issues that the workers endure. Workers become ill and hence less productive. As factory workers learn more about air pollution issues, who knows how thing will turn out in these sub-urban areas.

In China, 200 million houses are going to be built with bricks in rural areas in the coming 30 years. Using bricks will take 25% of the top layer of the agricultural land and half of the coal reserves of the country to actually make these bricks. These industrial processes will spew out an abundance of carbon emissions and worsen its air quality, particularly smog.

The coal fire power plants (one of their greater sources of energy) are also vehemently condemned by the international community. While incredibly lucrative for China, they pose health issues for many of its citizens and contribute to an egregious carbon footprint globally. So, how can they resolve their air pollution and carbon emission crisis? Do you think a carbon tax would work for this nation? For a critical economic and environmental analysis on this issue, take a glance at this post courtesy of the marginal revolution.