Fiscal Policy Of China's New Energy Development Promotion

Energy is an important support for the modern economy. It lays a solid foundation for theexistence and development of human beings and plays an indispensable role for the development ofeconomic and society. Since the beginning of industrialization, fuels and energy such as coal, oil,natural gas and other fossil has become the material basis for the survival of human society. Withthe rapid development of Chinese economy and rapid population growth, the demand for energy isgrowing. The increasing energy consumption and dwindling traditional energy resources cannotmeet the needs of the development of national economic. The rapid growth of the demand ofenergy and slow release of supply had become the biggest bottleneck which will limit thecontinued rapid growth of China’s economy. In addition, environmental degradation caused by itsconsumption is increasingly apparent, along with the international community’s concerning oncarbon dioxide emissions, so the future energy use in China has also been impacted from externalpressure. In this case, China urgently needs new energy sources to meet growing domestic demandfor energy and to reduce greenhouse gas emissions.New energy sources include solar, wind, biomass, geothermal, ocean energy and tidal energy.China’s new energy resources are relatively abundant. In the context of this reality, thedevelopment of new energy has a very important strategic significance for the country’s energysecurity and environmental improvement. First, the new energy can replace traditional fossil energyand cover the shortages of oil and natural gas resources to increase energy supply, to meet theenergy demand and to assure energy security. Secondly, the widely application of new energy isbenefit to the change of our current coal, oil and natural gas--oriented energy structure, reducinggreenhouse gas emissions, air pollution and other issues caused by the use of fossil energy. Giventhe features of new energy--decentralized, difficult to obtain, high investment and long paybackcyclical, China has introduced a number of financial and tax incentives, but in the actualimplementation of the policy, it exposed many problems, such as: the absence of systematic infiscal policy making-process; areas and stages of policy supporting unclearly defined; singlemarket incentives for development efforts are not sufficient; tax incentives have some limitations;policy is difficult to implement. In full consideration of the distribution and development of newenergy resources in this stage, new energy industry needs the country to play a leading role in theindustrial development to protect its sustainable development. China is facing resources andenvironmental constraints and the international climate change, thus the research of fiscal and taxpolicies which will promote the development of new energy has great practical significance.