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2013-04-02

What should be the priority of environmental policy in China?

Comments on Adele C. Morris, Warwick J. McKibbin and Peter J. Wilcoxen "China’s carbon tax highlights the need for a new track of climate talks", 19/03/2013, http://www.eastasiaforum.org/2013/03/19/chinas-carbon-tax-highlights-the-need-for-a-new-track-of-climate-talks/

While China’s announcement of a carbon tax should be welcomed and the authors’ suggestion of establishing a carbon price consultation mechanism is undoubtedly very useful, from an economics point of view, whether unilaterally imposing a carbon tax is the most optimal environmental policy for China or not is a question.
I would suspect that the marginal benefits of reducing its tangible air pollution and water pollution are likely to be higher than the marginal benefits of a general reduction in emissions, particularly when measured against the costs and measured in local rather than global terms and the fact that a reduction in air pollution also has an effect in reducing emissions.
But economics is economics and politics is politics. Should China adopt a carbon tax, it will be good for the world.

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