Beijing creates hefty gasoline pollution tax to fight massive smog problem ($6/gallon)

Beijing smog
CC BY 3.0 Flickr

If you want less of something, you can tax it*. The government of Beijing seems to have finally caught up on its economics 101 reading list, because it has decided to create a pollution tax to be applied to gasoline to fight the truly horrendous smog that has been choking up the city for years.

Beijing's not being timid either. They're not slapping a couple of percents extra tax on gas and hoping it'll make a difference.. The pollution tax will be hefty enough to truly make fuel economy a priority:

Drivers buying gas in Beijing currently have to pay a base 17 percent tax for every liter of gas purchased. Additionally, there is a fixed tax of one yuan ($.16) for every liter purchased, as well as a .07 percent urban construction tax and .03 percent education tax. If the pollution tax is officially added, average taxes for every liter of gas sold in Beijing will reach ten yuan ($1.62). (source)

So at $1.62 per liter just in tax, that's the equivalent of about $6 in tax per US gallon (there are 3.785 liters in a US gallon).

And this new pollution tax isn't just for Beijing either. They're planning to try it in other cities around China, though it's not clear if the amount of the tax will be the same or if it will vary.

china asia UN smog cloud sunlight sun tiananmen

It's hard to trust the official data from the Chinese government about most things, but when it comes to air pollution in Beijing, there's a good proxy: The U.S. Embassy has been publishing its own air quality measurements, and they're pretty much uniformly horrible. So not too surprisingly, because of this and other issues, pollution is now the #1 cause of social unrest in China.

* That's why it's a good idea to tax undesirables like CO2 emissions and industrial toxins, and probably not a good idea to tax things we want like labor and education.

Via Gasgoo, GreenCarReports

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