(Xinhua)
Updated: 2007-08-04 16:00

The current environment-related taxes and fees in China can not effectively control pollution, said Chang Jiwen, an expert with a government think-tank.

"The taxes and fees on environment are insufficient and nonstandard to rein in the use of fossil fuel," said Chang, a research fellow with the law institute of the Chinese Academy of Social Sciences.

Without an effective tax system, pollution monitoring authorities tend to randomly charge "pollution fees", usually "a small amount" compared to the lucrative business of major polluters, said Chang.

He said the current tax is not in line with the international practice in controlling greenhouse gas.

A standardized environment tax should be produced to promote the use of environment-friendly resources and discourage the manufacturing, import and distribution of unsustainable products, he said.

The new tax, dubbed "green tax", will be effective in handling environmental charges. It will mainly tax on pollution discharge of sewage and sulfur dioxide, according to Wang Fengnian, associate professor with the Beijing-based Tsinghua University.

Pan Yue, vice director of the State Environmental Protection Administration (SEPA), said a new taxation category to protect environment is to take shape in China.

China will soon issue an environment-friendly loan policy, or "green credit policy", asking banks or financial institutions to grant loans only to companies that have passed environmental assessment and implemented environmental protection regulations, Pan earlier said.

He said other economic policies including insurance and security policies targeting environmental protection will be released as soon as possible after discussions with the financial ministry and regulatory commissions of insurance and securities.