Fri, Jan 02, 2009 - Page 4 News List

FEATURE : Economics upstages the environment

RHETORIC A National Chengchi University professor of public finance said the about-face over carbon emissions came as the Cabinet bowed to pressure from businesses

By Shih Hsiu-chuan  /  STAFF REPORTER

Tseng said the General Local Tax Act (地方稅法通則) allows a carbon tax to be charged by local governments.

The committee was commissioned by the Cabinet to carry out an in-depth review of the current tax system and study tax reform issues within a year.

A Cabinet official, who requested anonymity, said the Executive Yuan relayed its concern to the ministry over the matter, but he denied it was because of pressure from businesses.

“A carbon tax is not an issue that can be dealt with alone, as it will bear on the economy ... Another problem with carbon tax is the potential for double taxation,” he said.

The official said “green” taxes are not a Cabinet priority, but they will definitely be in the committee’s tax reform proposal, expected in June.

“Unemployment is more urgent than anything,” the anonymous official said.

But the reasons given for the delay in imposing a carbon tax sounded more like excuses to environmentalists.

Lin Tze-luen (林子倫), an associate professor of political science at National Taiwan University, said he agreed that carbon tax should be charged by the central government and that the taxation system should be reviewed as a whole.

“Given that offering low-carbon products and services is a global trend, rather than postponing imposing the price of carbon dioxide emissions on emitters, the government should have helped businesses adapt to incorporating environmental matters in production process to avoid trade sanctions that could be brought into post-Kyoto arrangements and to enhance competitiveness,” Lin said.

What added to concerns over potential rises in emissions was that, in these times of hardship, there were signs the government was falling back on energy-intensive, polluting industries.

In June, the Environmental Protection Agency gave conditional approval to an expansion proposal by Dragon Steel Corp, under which the company needed to reduce carbon dioxide emissions by 15 percent by 2014; it would otherwise be fined a carbon-reduction fee of NT$1.5 billion a year.

Although it was the first case requiring a major development to pay a carbon-reduction fee, it was criticized as an “empty pledge” because the Greenhouse Gas Reduction Act (溫室氣體減量法) hasn’t been yet enacted.

This month, the Executive Yuan established a task force to facilitate a cracker complex project by Kuokuang Petrochemical Technology (國光石化), which last year planned to shift the project overseas because of opposition from conservationists and fishermen in Changhua County.

More recently, Liu promised Formosa Plastic Group could speed up its fifth-stage expansion proposal of a sixth naphtha cracker plant when he visited an industrial park in Mailiao, another long-term controversial project in light of the massive emissions generated by the group.

Wang To-far (王塗發), a professor of economics at National Taipei University, said that steel, petrochemicals, concrete, paper and other high energy-consuming industries consumed one-third of Taiwan’s total energy, while creating less than 5 percent of the nation’s GDP in recent years.

“Currently about half of the country’s carbon dioxide emissions comes from the industrial sector. The soon-to-be-built plants will make it even harder to achieve Ma’s emission reduction target,” Pan said.

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