环境保护部环境规划院

Study on Design of Wastewater Tax: from Wastewater Pollutant

Discharge Levy to Environmental Tax

Ge Chazhong Chinese Academy For Environmental Planning

Nov 4, 2010 Bangkok

环境保护部环境规划院

Why This Topic?

Governme Research topic under National

Water Pollution Control Key Special

Program for 11th five year period

ntal decision on introducing environmental

tax

Issues related to pollution levy on water

pollutants discharge

环境保护部环境规划院

Presentation Outline

Brief introduction

Comparison

Design

Obstacle

Conclusion

环境保护部环境规划院

I. Brief introduction of China’s wastewater pollutant discharge levy policy

环境保护部环境规划院

I. Brief introduction

The first economic policy for

environmental protection in China• In late 1970s• “polluter pay principle”• According to the amount of

pollutants discharged using pollutant equevelents

• played a positive role

环境保护部环境规划院

I. Brief introduction

• Nationwide policy–31 provincial level–333 prefecture level –2,860 county level cities

环境保护部环境规划院

I. Brief introduction

• 80.775 billion Yuan (RMB) (From the new regulation in 2003 to the end of June 2009) including water and air pollutants as well as solid wastes

• 147.95 billion Yuan (RMB) (the cumulatively fees in about 30 years from 1982)

环境保护部环境规划院

Figure 1 Water Pollution Discharge fee Collection in 2004-2009 (Data source: Statistical Yearbook on Environment for All Years)

环境保护部环境规划院

I. Brief introduction

• wastewater and waste gas large proportion

• wastewater pollutant discharge fee a down trend

• waste gas an upward trend

• noise and hazardous waste a very small proportion and does not change considerably

环境保护部环境规划院

I. Brief introduction

Causes of declining trend for water pollutant

urban wastewater treatment facilities being put into use

New policies on reducing emissions from “concentration control ” to

“ total quantity control ”

环境保护部环境规划院

I. Brief introduction

Need to improve• Legal basis for discharge levy

system is insufficient • Pollutant discharge charge rates

are low and levied scopes are incomplete

• Levy procedure is complicated and workload is high

环境保护部环境规划院

II. Comparison between wastewater

pollutant discharge levy and

environmental tax

环境保护部环境规划院

II. Comparison

Both are economic instruments in accordance with the principle of “polluter pay principle”Both can contribute to pollution reduction through internalizing external cost

环境保护部环境规划院

II. Comparison

differences• different roles• different recognitions • different departments for

implementing these policies• different use of funds

环境保护部环境规划院

Can wastewater tax solve problems

of low collection rate of wastewater

pollutant discharge levy???

环境保护部环境规划院

II. Comparison

• can raise the collection rate to some extent

• may not be quickly raised to a very high level due to different reasons for current low collection rate

环境保护部环境规划院

III. Design for wastewater tax

环境保护部环境规划院

III. Design

basic principles to design wastewater tax:Effectiveness Fairness Operability

Effectiveness

Simple tax base Stable revenue

环境保护部环境规划院

III. Design

Collection object and scope• wastewater discharged from

pollution sources, including industrial ones and urban WWTPs

环境保护部环境规划院

III. Design

Taxpayer all those that discharge

wastewater to water body, including industrial enterprises, public institutions, commercial and service enterprises, wastewater treatment plants and other organizations and excluding residents.

环境保护部环境规划院

III. Design

Tax base and its calculationwastewater emission quantity

Tax amount payable = wastewater emission quantity ×industrial pollution intensity factor × unit tax amount

环境保护部环境规划院

III. DesignIndustry Pollution intensity factor Nonferrous metal alloy manufacturing 0.5 Inorganic base production 0.5 Machine finish paper and paper board production 1.2 Dye production 2.5 Complex fertilizer production 1.0 Beer production 0.5 Hoisting and conveying equipment manufacturing 1.0 Refit vehicle manufacturing 0.8 Entire vehicle manufacturing 0.5 Manufacturing of tracked special purpose vehicles for industries and mines

0.5

环境保护部环境规划院

III. Design

Enterprises have the emission quantity data by monitoring and being verified by environmental protection departments, the quantity data should be used first as tax base.

Otherwise, follow this formula : Wastewater emission quantity =

water intake quantity (product yield) ×wastewater emission factor

环境保护部环境规划院

III. Design

Tax rate0.2Yuan(RMB)/ton Tax rate should be determined to be higher

than pollution treatment cost and enterprises’ bearing capability should be considered

In the preliminary stage it can be approximately equivalent to the present discharge levy rates

环境保护部环境规划院

III. Design

Tax preference• The enterprises that adopt

advanced technologies and install and normally operate wastewater treatment system should be given preferential policies

环境保护部环境规划院

(III) Comparison between wastewater emission tax amount and discharge fee collection amount

Discharge fee (10,000Yuan)

Enterprise name

Fresh water

consumption

(10,000t)

Wastewater

emission

amount

(10,000t)

COD Ammonia

nitrogen Petroleum Total

Calculation of

emission tax

amount

(10,000Yuan)

Nonferrous metal

alloy manufacturing 271.53 43.41 2.68 0.80 2.48 5.97 4.34

Inorganic base

production 353.70 2.48 12.10 2.38 0.04 14.53 0.25

Machine finish

paper and paper

board production

156.00 98.00 1.45 1.45 23.52

Machine finish

paper and paper

board production

22.50 10.80 1.08 1.08 2.59

Complex fertilizer

production 57.30 10.60 0.30 0.30 2.12

Beer production 61.35 41.40 1.28 0.01 1.29 4.14

Hoisting and

conveying

equipment

manufacturing

10.93 2.73 0.09 0.09 0.55

Refit vehicle

manufacturing 9.86 4.50 0.31 0.04 0.35 0.72

Entire vehicle

manufacturing 117.60 82.32 0.72 0.02 0.74 8.23

Manufacturing of

tracked special

purpose vehicles for

industries and mines

3.66 2.93 0.08 0.01 0.08 0.29

Entire vehicle

manufacturing 23.38 19.87 0.87 0.50 1.37 1.99

Total 1087.82 319.04 20.96 3.20 3.09 27.24 52.88 Table 2 Comparison between Enterprises’ Wastewater Discharge fee

Collection Amount and Wastewater tax Amount

环境保护部环境规划院

IV. Analyze the obstacle for changing

wastewater pollutant discharge fee to

wastewater tax

环境保护部环境规划院

IV. The obstacle

Institutional obstacleThe relationship between

environmental protection departments and pollution emitting enterprises will be greatly reduced

The deterrence of environmental protection departments is weakened

How to balance the benefits of different regions is a difficulty

环境保护部环境规划院

IV. The obstacle

Technical obstacleEmission collection rate is

difficult to be directly converted to tax rate

Tax base of wastewater tax is difficult to be calculated

环境保护部环境规划院

IV. The obstacle

Policy coordination• Its combination with financial system

reform must be considered • It is necessary to consider how to

ensure the fund for environmental protection investment through financial policies

• It is necessary to accurately deal with relations with present value added tax, consumption tax, resource tax, customs dues and income tax

环境保护部环境规划院

V. Conclusion

环境保护部环境规划院

V. Conclusion

Compared with charge, tax has some

advantages:• Tax collection to some extent can

overcome charge randomness, arrears and refusal to pay

• Combining wastewater tax with other taxes can save collection cost

环境保护部环境规划院

V. Conclusion

• Some obstacles still exist in converting discharge fees into environmental tax

环境保护部环境规划院

V. Conclusion

• It is inappropriate to convert wastewater pollutant discharge levy to wastewater tax in the near term.

环境保护部环境规划院

Thank you!Please visit http://www.caep.org.cn

E-mail:gecz@caep.org.cn