China Center for International Economic Exchanges

Green Fiscal and Tax Policies
Author:LIANG Yunfeng
  • Introduction
  • Table of Contents

Resource and environment is a major theoretical and practical issue which attracts great attention worldwide. After thirty years of high economic growth during the reforming and opening, China is experiencing severe resource and environmental bottleneck. China can only get out the resource and environment dilemma and achieve sustainable development by transforming economic development pattern and developing green economy. Green economy is an economic development model that can achieve the harmonious development of socio-economy, resources and environment.All of the key areas of green economy including ecological environment, energy and resources, green technology and green industry are featured with externality and public goods. These features suggest more fiscal and tax policies are needed for green economy than for traditional economy. Choosing right target area to implement policies that are compatible to development of green economy is therefore important to ensure green fiscal and tax policies effectively guide economic transformation.

This book is based on Liang Yunfeng's post-doctoral project titled "Study on Green Fiscal and Tax Policies". Dr.Liang has been working in the area of fiscal and tax policies for nearly 20 years. In 2003, she began to pay attention to the resource and environment issue. Over last few years, she has been working on how to use fiscal and tax policies tackle resource and environment problems and facilitate the development of green economy. As the supervisor of her post-doctoral research, I am very impressed by her diligence and interest in the study on green fiscal and tax policies. With our joint effort, she finished a report of over 200,000-words in two years, which is highly regarded by experts in this field and is awarded as the best post-doctoral reports.

From a macro economic perspective and assumping green pathway as essential in solving resource and environmental problems this book systematically summarizes the experiences and practices of developed countries in developing green economy, analyzes evolutionary process of green fiscal and tax policies in our country and points out problems in current policies. Following sustainable development theory,the public goods theory,thee externality theory and the publicfinance theory,the author focuses on key fields of green economy and proposes a combination of fiscal and tax policies by taking into consideration of the degree, nature and feature of public good in each area. The topic of this book is significantand the research methodology is novel. As a result,thepolicy recommendations can be useful for decision-makers.
This book has the following characteristics and innovations.
I. In terms of theoretical development, this book further clarifies the conceptsconnotations and relationship between green economy and green fiscal and tax policy and systematically discusses the role of green fiscal and tax policies in dealing with the resources and environment constraints and guiding and stimulating green economy. I proposes a "double-wheel drive" development model suggesting both pull from market and push from government are necessary to develop green economy. The author then analyzes the relationships between green fiscal and tax policies and macroeconomic regulation and control, between green economy and sustainable development, and between social and economic development and natural and ecological environment. Based on the discussion, the author suggests that green fiscal and tax policies have improved and greened existing policies under the idea of public finance and efficient finance, and their role in protecting and restoring resources and environment is irreplaceable. Theseresearch results have important theoretical significance in improving our fiscal and taxsystem.

II. In terms of methodology, the author breaks through the traditional analytical framework for fiscal and taxation policy research that is dominated by revenue and expenditure, and incorporates the fiscal and tax policies into the operation of green economy. The book provides in-depth analysis on four key areas: protection and compensation of ecological environment, development and utilization of energy and resources, innovation and application of green technology, and fostering and development of green industry. Based on the analysis, the author proposes corresponding fiscal and tax policy combination as well as in-depth, innovative suggestions that can be utilized by decision-makers. This methodology provides a new way of thinking and is helpful for constructing a new framework of green fiscal and tax policy.

III. In terms of policy design,the author proposes some pertinent and forward-looking policy proposals. In the area of development and utilization of energy and resources, the author suggests a policy combination dominated by royalty, and supplemented by users charge and fee for exploration right, and a three-step strategy is proposed.

In conclusion, this book provides a clear way of thinking, a sensible framework, an accurate and detailed information, a suitable methodology, convincing arguments, and proper writing. Furthermore,this book reflects author's effort of combining theory and practice and is pioneering and innovative. This book will be beneficial to decision-makers, fellow researchers and practitioners in this field. I am pleased to write this preface, and sincerely hope that Dr.Liang would regard this book as a new start for further research on green economy and fiscal and tax policies.

                                                                                        April, 2010



Chapter 1 Introduction

1.1 Background and Significance
1.2 Status Quo and Trend of Study on Green Fiscal and Tax Policies at Home and Abroad
1.3 Way of Thinking and Study Methodology
1.4 Main Contents and Structural Arrangement
1.5 Main Innovations
1.6 Difficulties and Future Study Directions

Chapter 2 Analysis of Mechanism of Green Fiscal and Tax Policies
2.1 Developing Green Economy is a Good Way to Shake off the Restraint of Resources and Environment
2.2 Supporting Theory of Governments to Intervene Green Economy
2.3 Analysis of Mechanism of the Role of Fiscal Policies on Green Economy

Chapter 3 Study on the Evolution of China's Green Fiscal Policies
3.1 History of China's Green Fiscal Policies
3.2 The Achievements Made under the Fiscal Policies and Their Defects
3.3 The Fiscal Policies Need to be Improved

Chapter 4 One of the Focal Points of GFP: Environmental Protection and Compensation
4.1 Status of China's Environment
4.2 Demand of Fiscal Policies for Environmental Protection and Compensation
4.3 The Practice of the Existing Fiscal Policies and Their Problems
4.4 Improving the Fiscal Policies for Environmental Protection and Compensation
4.5 Building an Improved Supplementary Market Mechanism

Chapter 5 The Second Priority of Green Fiscal and Tax Policies: Exploitation & Use of Resources & Energy
5.1 Characteristics of Heritage and Reserve of Resources in China & Relevant Demand Analysis
5.2 Evaluation of China's Resource Taxation and Financial Policies and International Comparison
5.3 Suggestions on the Improvement of China's Fiscal Policies on Resources and Energies
5.4 Supporting Measures

Chapter 6 The Third Priority of Green Fiscal and Tax Policies: Innovation & Application of Environmentally Sound Technology
6.1 Green Technology & Its Trends of Development
6.2 Strengthening Fiscal Support on Green Technology Innovation
6.3 Fiscal Measures for Facilitating the Commercialization of Green Technologies

Chapter 7 The Fourth Priority of Fiscal and Tax Policies: Cultivation & Development of Green Industry
7.1 Significance of the Development of Green Industry
7.2 To Strengthen Green Investment and Build Green Energy Industry in China
7.3 Fiscal and Tax Policies in Favor of Environmental Protection Industries
7.4 To Urge Internalization of Environmental Cost and Promote Green Manufacturing

Chapter 8 Green Financial Policy Overview
8.1 Green Financial Policy
8.2 Improve Financial Policy in Accordance with the Needs of Green Economy
8.3 Strengthening Coordination and Cooperation on Relevant Measures