Research On China’s Industrial Wastewater Pollution Control Tax System

Ecological environment, especially water environment, is the foundation for the survival of human, animal and plants. With the frequent promotion of human activities, water environment is getting deteriorated, and gradually evolved to be a worldwide problem for economic development and social progress. And this problem seems to be much more serious for China which is still at the stage of development.As one of the thirteen countries which are seriously lack of water, the freshwater resources in our country are only accounted for about 2.6%, and per capita water resources are only 28% of the world’s average level, what’s more, the uneven special distribution of water resources exacerbates our country’s water shortage situation. In the limited freshwater resources,80% of which is in southern China, and only 4% is in northwest areas, water resources gradually become an important restriction for China’s economic development. In recent years, with the rapid development of economy and population, contradiction caused by shortage of water is getting increasingly sharp. Viewed from the per capita water resources quantity point, China’s water resources is only 2200 cubic meters, which is only 1/4 of world’s average level and 1/7 of that of Russia’s,1/50 of that of Canada’s. At present, there are 669 cities in China, of which more than 400 cities face the problem of lack of water, and 110 cities is suffering a extremely short of water, industrial production is seriously affected.At the same time, the problem of water environment deterioration caused by pollution is also becoming serious, no matter environment contradictions or development pressures are increasing. On the one hand, the western developed countries’ environmental protection consciousness gradually strengthens after economics development which paid a high price for environment. In order to prevent national natural environment influenced by economic development, these countries have planned to transfer those plants which need to pay a high environmental cost to developing countries to achieve the optimization of industrial structure. While China, famous for the ’world factory’ with its open trade policies and low costs of labor, attracts a large number of overseas investment, among which there are many polluting industries, hence the pollution problem becomes more exposed. On the other hand, because the mode of China’s economy development has been extensive for a long time, most enterprises pay more attention to development speed while ignore the quality, it directs a consequence that pollution emissions exceed environmental capacity, ecosystem functions degrades and environment becomes fragile. According to statistics, by the end of 2012, our country’s wastewater emissions has already been more than the total number of USA’s, Japan’s and India’s. Under the dual pressure on shortage of water resources and pollution’s excess discharge, water protection problem undoubtedly becomes an important obstacle of sustainable economic and social development in China.In China, there are mainly two kinds of source of wastewater, respectively is urban sewage and industrial wastewater. Although recent years the proportion of industrial wastewater emissions is stable, even has a slightly declining trend, because of the characteristics of industrial wastewater, there are lots of pollutants, such as heavy metal, COD, cyanide and so on, which can make strong environmental destruction. If we do not take effective management, the consequence of random discharge is unbearable to contemplate.At present, the main way to control industrial wastewater is to levy sewage fees on enterprises, although the ’Sewage Fee Collection Management Ordinance’ clearly stipulates that ’the manner of discharge pollutants to water should pay sewage fees according to the type and quantity of pollutants, if the amount of pollutants discharge is more than prescribed national or local standards, should double pay sewage fees according to the type and quantity of pollutants’, however, because of the overall collection standards is still too low, water sections’daily operation depends on financial investments throughout the year which makes it difficult to achieve the policy goal of encouraging polluters to reduce pollutants emissions or preventing pollution. In contrast, taking industrial enterprises as the object to levy wastewater tax timely is not only an inevitable choice and requirement to improve environmental economic policies and promote environmental tax reform, but also an important measure to optimize the allocation of resources and maintain economic development steadily.Based on the above background, this paper designs the elements of industrial wastewater pollution control tax combining with China’s reality with the reference of foreign typical countries’ advanced experiences and the background of analysis of present industrial wastewater charging system’s shortcoming. Through using CGE model, we systematically estimate the comprehensive influences of present wastewater control policy and industrial wastewater tax, besides, we still make a decomposition analysis on pollutants emissions reduction contribution. Finally, we give some reference suggestions and policy measures according to the simulation results.There are nine parts in the full paper.The first part is introduction, the main content is to introduce this research’s background and meaning, illustrate the research idea and method of this paper based on the comprehensive induction of domestic and foreign researches, at the same time, we also point out this paper’s innovation and deficiency.The second part reviews the concepts and taxation theories which are related to water pollution governance, lay a theoretical foundation for the subsequent analysis.The third part illustrates current fiscal and taxation policies on industrial wastewater control in China, and gives some necessary analysis on China’s current industrial wastewater control policies and point out shortcomings. Besides, this part also finds out possible reasons for those problems.The forth part introduces the typical foreign countries’ water pollution control methods and summarize the enlightenments to our country.The fifth part designs the elements of industrial wastewater tax system, such as taxpayers, tax basis, tax rate, tax preferential policies and so on, according to China’s current situation. Besides, this part also estimates an applicable tax rate of industrial wastewater tax by using the Logistic model.The sixth part constructs a CGE model which includes the industrial wastewater tax policy, and compiles an environment social accounting matrix (ESAM) which makes industrial wastewater tax embedded and keeps it balanced.The seventh part takes China’s current industrial wastewater pollution control policy as baseline scenario, makes analysis of simulation scenarios and the marginal contribution of macro variables.The eighth part makes an analysis of industrial wastewater pollutants’ driving factors using LMDI method with the background of industrial wastewater tax.The ninth part is policy recommendations, which gives some suggestions according to the CGE model’s simulation results.