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China’s Cabinet Studies Proposed Environmental-Protection Tax

October 20, 2011

Oct. 21 (Bloomberg) -- China’s State Council is studying the introduction of an environmental protection tax, and the nation plans to increase environmental spending, including it in the annual budgets of all levels of government.

The government will also support bond issues for companies undertaking environmental projects and provide tax breaks, according to a statement posted on the government’s website yesterday after a Cabinet meeting headed by Premier Wen Jiabao.

The world’s biggest polluter is pushing local authorities to deal with damage to the environment caused by two decades of expansion averaging more than 10 percent a year. Wen last month called for increased efforts to conserve energy and reduce emissions, describing the situation as “rather severe.”

China emits more greenhouse gases than any other country. It vowed to reduce carbon emissions per unit of gross domestic product by as much as 45 percent in 2020 from 2005 levels. The government missed a target of reducing energy consumption by 20 percent between 2006 and 2010, even after shutting at least 7,000 factories and banning power-price discounts for some industries.

The government will also provide tax breaks for some auto- fuel businesses, and may adjust import and export tariffs on “high polluting” products, according to the statement, dated Oct. 17.

The Ministry of Environmental Protection said last month China’s thermal power plants may need upgrading at a cost of 260 billion yuan ($41 billion) to meet new emissions rules.

--Daryl Loo. Editors: Nerys Avery, Joshua Fellman

To contact Bloomberg News staff for this story: Daryl Loo in Beijing at

To contact the editor responsible for this story: Jason Gale at

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