The Legal Daily has analyzed the significance of China's new environmental protection tax, which replaced the pollutant discharge fee on January 1.
Both instruments share the aim of preventing local governments from exempting companies from the repercussions of pollution, and force businesses to upgrade their technology and shift to cleaner production, says Ma Jun, an environmentalist who heads China's Institute of Public and Environmental Affairs.
But they differ in their power and effectiveness because while the original fees were taken by environmental departments, the new tax is levied by China's more powerful tax departments.
The change will drive companies to reduce emissions and save energy, Ma says, adding that pollutant discharge fees left green enterprises worse off because it cost more to save energy than it did to pollute. Instead, the new tax regime gives green companies tax protection. It also incentivizes green transformation, energy conservation, and emissions reduction and encourages more companies to manage their emissions.
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