China proposes introducing a carbon tax

The developing world takes the lead in fighting climate change.

There have been growing murmurs from China that the country may be getting serious about tackling climate change, and yesterday Xinhua News Agency announced that:

 

 

The news follows on from the Chinese government's promise earlier this month to do "whatever it takes" to cap coal use in the country. The official — albeit non-binding — target is now for coal consumption to peak at 4 billion tonnes in 2015.

The full Xinhua report on the carbon tax is thin on details, but points to an earlier report from the Ministry of Finance which suggested "levying a carbon tax in 2012 at 10 yuan [£1.05] per tonne of carbon dioxide, as well as recommended increasing the tax to 50 yuan [£5.27] per tonne by 2020."

The New York Times' Vikas Bajaj notes that:

China’s plan will not make a serious dent in global warming, though the tax may still have some beneficial impact within the country, where air pollution is a serious problem. A paper from the Chinese Academy for Environmental Planning suggests that a small tax could still raise revenue and provide an incentive to reduce emissions, bolstering China’s renewable energy industry.

As much as many in the West have used the inaction of China as an excuse not to do anything about climate change ourselves, that logic has a corollary. China is such a massive nation that it is starting to be in its own interest to break the collective action problem which has plagued environmental causes forever. Its problems are compounded by the fact that not only is it heavily reliant on fossil fuels, but it uses those fuels in the most polluting manner possible. A glance at recent stories about smog in Beijing should reveal why the government is so concerned about reducing pollution.

The real choice the nation is faced with is whether to do that by following the Western path, of replacing polluting fossil fuels with cleaner ones, or skip that stage altogether and move straight to renewables. That move would be reminiscent of the way that many developing nations, particularly in Africa, have skipped wired communications infrastructure entirely and moved straight to mobile phones. It has its disadvantages, of course — primarily speed and cost — but also offers a huge prize at the end of the transition: if China can become a genuine world leader in renewable technology, it would likely have the 21st century sewn-up for good.

If that is the aim, this carbon tax will only be a stepping-stone on the journey. For it to truly offset the cost of pollution (and be an externality tax, rather than just a minor penalty for emitting carbon), it would have to be set in the order of £50-£100 a tonne. But if China starts to lead the way in fighting climate change, it will make it significantly harder for the developed world to carry on abdicating its responsibility.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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In your 30s? You missed out on £26,000 and you're not even protesting

The 1980s kids seem resigned to their fate - for now. 

Imagine you’re in your thirties, and you’re renting in a shared house, on roughly the same pay you earned five years ago. Now imagine you have a friend, also in their thirties. This friend owns their own home, gets pay rises every year and has a more generous pension to beat. In fact, they are twice as rich as you. 

When you try to talk about how worried you are about your financial situation, the friend shrugs and says: “I was in that situation too.”

Un-friend, right? But this is, in fact, reality. A study from the Institute for Fiscal Studies found that Brits in their early thirties have a median wealth of £27,000. But ten years ago, a thirty something had £53,000. In other words, that unbearable friend is just someone exactly the same as you, who is now in their forties. 

Not only do Brits born in the early 1980s have half the wealth they would have had if they were born in the 1970s, but they are the first generation to be in this position since World War II.  According to the IFS study, each cohort has got progressively richer. But then, just as the 1980s kids were reaching adulthood, a couple of things happened at once.

House prices raced ahead of wages. Employers made pensions less generous. And, at the crucial point that the 1980s kids were finding their feet in the jobs market, the recession struck. The 1980s kids didn’t manage to buy homes in time to take advantage of low mortgage rates. Instead, they are stuck paying increasing amounts of rent. 

If the wealth distribution between someone in their 30s and someone in their 40s is stark, this is only the starting point in intergenerational inequality. The IFS expects pensioners’ incomes to race ahead of workers in the coming decade. 

So why, given this unprecedented reversal in fortunes, are Brits in their early thirties not marching in the streets? Why are they not burning tyres outside the Treasury while shouting: “Give us out £26k back?” 

The obvious fact that no one is going to be protesting their granny’s good fortune aside, it seems one reason for the 1980s kids’ resignation is they are still in denial. One thirty something wrote to The Staggers that the idea of being able to buy a house had become too abstract to worry about. Instead:

“You just try and get through this month and then worry about next month, which is probably self-defeating, but I think it's quite tough to get in the mindset that you're going to put something by so maybe in 10 years you can buy a shoebox a two-hour train ride from where you actually want to be.”

Another reflected that “people keep saying ‘something will turn up’”.

The Staggers turned to our resident thirty something, Yo Zushi, for his thoughts. He agreed with the IFS analysis that the recession mattered:

"We were spoiled by an artificially inflated balloon of cheap credit and growing up was something you did… later. Then the crash came in 2007-2008, and it became something we couldn’t afford to do. 

I would have got round to becoming comfortably off, I tell myself, had I been given another ten years of amoral capitalist boom to do so. Many of those who were born in the early 1970s drifted along, took a nap and woke up in possession of a house, all mod cons and a decent-paying job. But we slightly younger Gen X-ers followed in their slipstream and somehow fell off the edge. Oh well. "

Will the inertia of the1980s kids last? Perhaps – but Zushi sees in the support for Jeremy Corbyn, a swell of feeling at last. “Our lack of access to the life we were promised in our teens has woken many of us up to why things suck. That’s a good thing. 

“And now we have Corbyn to help sort it all out. That’s not meant sarcastically – I really think he’ll do it.”