Chinese leaders look to end tax breaks for polluters

A chimney spouts a column of smoke in a residential and commercial district of Beijing. Chinese Premier Wen Jiabao pledged Friday to phase out tax breaks and discounts on land and electricity for high-polluting industries, saying the country's environmental situation was grim and required urgent action.

? Premier Wen Jiabao pledged Friday to help clean China’s air and water and combat global warming by phasing out tax breaks and discounts on land and electricity for highly polluting industries.

“More work on energy conservation and emissions reduction is urgently required to deal with global climate change,” Wen said. “Our country is a major coal producer and consumer, and reducing polluting emissions is a responsibility we should bear.”

China’s coal habit has made it a major contributor to greenhouse gases, mainly carbon dioxide, that scientists say contribute to global warming.

China accounted for 15 percent of the world’s greenhouse gases in 2000, second only to the United States’ 21 percent, but the fast-growing Chinese economy is expected to surpass the U.S. in emissions in the next couple of years.

China’s 30-year boom has left waterways and coastlines polluted by industrial and farm chemicals and domestic sewage. Towns are littered with garbage and construction waste, and its cities are enveloped in smog.

“We must clearly recognize that the situation the nation faces regarding energy conservation and emissions reduction is still quite grim,” Wen said at a meeting of other top government leaders, in a speech posted on the government Web site.

He noted that China has failed to meet earlier goals to reduce emissions and conserve energy.

It committed itself to cutting 20 percent of its energy use for every unit of gross domestic product by 2010, but last year it failed to meet the first phase – a 4 percent reduction. Instead, energy use fell by only 1.2 percent. Sulfur dioxide and other polluting emissions, meanwhile, are supposed to fall by 10 percent by 2010, but last year they rose slightly.

In his speech, Wen took aim at local governments that routinely offer free or cut-rate real estate and utilities to developers looking to set up job-creating businesses, such as steel mills or chemical plants. The premier said the government would “clean up and rectify preferential policies that give land and electricity discounts or tax breaks to energy-intensive or highly polluting industries.”

He didn’t lay out further details of the plan or say when it would be implemented.

Despite such central government mandates, Beijing often has difficulty ensuring that conservation initiatives are enforced at the local level, where many officials reap the rewards of China’s rapid industrialization at the expense of the environment.