Low-carbon Strategy in China: from the lowcarbon Industry Park to the Low-carbon
Financial and Tax Polices
Prof. Xu Zhengzhong Chinese Academy of Governance
Secretary General, China Public Economic Association
Low-carbon Development Models based on
Different Driving Forces in China
Technology-led model T (Model T).
Project-led mode1 P (Model P)..
Enterprise-led models (Model E).
Non-governmental organizations-led model (Model N)
Capital-driven model (model CT)
Consume-guide model (Model CG)
Government-driven model (Model G)
Legally-bound model (Model L)
Low-carbon Economy Models Based on Different Targets
low-carbon city model,
low-carbon industry model
carbon sequestration model.
Low-carbon Economic System
Eco-system
Waste gas
Waste gas
Economic system
Electricity
Heating
Recycle
d water
Waste
residue
Sewage
Treatment
Heat
MELICSEA
Thermal power
stations
Electricit
y
Domestic
water
Waste
Water
Ash
Inflammable
Waste
Gangue
Fly Ash
Aeolian
Low-carbon
Economic
Development Strategies
Low-carbon
System
Energy
Policy
New energy
Energy structure
High
energy
efficiency
Energy
conservation
and
Emission reduction
Low carbon energy
Industry
Policy
Emerging Industry
Industry structure
Low-carbon
agriculture
Low-carbon
industry policy
Low-carbon service
industry
Policy Core
Low-carbon
Culture
Market
Policy
Market access
Carbon
exchange
Low-carbon tax
and finance
Ecocompensation
Eco-financial
Policy
Low-carbon
price
Consump
tion
Policy
Horizontal
Policy Chain
Technolo
gy
Policy
Consumption
Guidance
Consumption
environment
Consumption
Demand Green
Consumption
Low-carbon
lifestyle
Tax and fiscal policies
provide the starting power
Financial
innovation
provides
continuous momentum
Policy Base
Basic
Manage
ment
Policy
New
energy
Technology
Energy
conservation
and
emission reduction
Carbon absorption
Technical
cooperation
Technical Standard
Energy Contract
Low-carbon
evaluation
Low-carbon
incentives
Low-carbon
control
Low-carbon pilot
Horizontal Implementing
Policy Chain
Construction of Low-Carbon Economic Policy Chain
Tax Category
Adjustment
Resource tax
（1）Enlarge taxation scope to cover to resources, such as land, sea, forest,
geothermal resource, etc.
（2）Appropriately Increase tax rates of some resource taxes, especially for these
that are under key protection and are prohibited in exploitation.
（3）Adjust current tax base. Eg. Output-based assessment should be replaced
by recoverable reserves to encourage resource recovering.
Consumption
tax
（1）Enlarge taxation scope to cover products that are with high energy
consumption and high carbon emissions and fail to meet energy conservation
standards.
（2）Develop differentiated tax rate. Tax rate should be based on energy
consumption and carbon emission. Current tax level of some consumer goods
need to be adjusted, Eg increase the tax rate of high-emission cars, while lower
that of low-emission cars and motorcycles
（3）Consider collecting oil consumption tax to improve public awareness on
energy serving and environmental protection.
Value-added
tax(VAT)
（1）Offer VAT deduction to key energy-saving equipment and products to
remove their price constraints within a given period of time.
（2）Remove tax reduction on toxic pesticide and agricultural plastic film.
business tax
(1) Exempt business tax of institutes, organizations and individuals that get
incomes from technical transfer, consultation, and service in energy-saving,
emission reduction, renewable energies R&D to encourage the dissemination and
utilization of energy-saving technologies.
income tax
（1） Increase the pre-tax deduction rate of R&D funds for energy-saving
equipment and products
（2） Apply the accelerated depreciation to some special equipment for
producing energy-saving products.
（3） Deduct or exempt income taxes of enterprises that purchased and installed
equipment for producing energy saving products.
（4）Exempt or reduce income tax of institutes and individuals who receive
income from low-carbon oriented technical services including technical transfer,
training, consultation, service, and outsourcing.
tax on buying
vehicles
(1) Give appropriate tax preference to clean energy or new energy vehicles.
vehicle and
vessel tax
(1) Adjust the base of vehicle and vessel tax. There should be different threshold
for vehicle and vessels with different energy consumption levels and gas emission.
tariff
（1）Impose tariff or environmental tariff on imported equipment with high
energy consumption and carbon emission.
(2) Impose tariff or environmental tariff on primary or semi-manufactured goods
which consume large amount of domestic natural resources and cause little or no
pollution in the destination countries.
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