Page 128 - Low Carbon Development in China and India
P. 128
of USD 8 per day for saloon cars, USD 21 for trucks, and USD 1 more 2.2
for taxies as surcharge. Meanwhile, the tax credit given to garages in
this area was cancelled. In addition to these measures, Singapore and
Milan levy additional high emission fees for vehicles with a high level
of emission. With respect to the use of fees collected, London applies
the congestion fee to the development of urban public transportation
means. Finally, New York and Los Angeles impose even higher parking
fees in the highly congested areas, which effectively lessened traffic
congestion. It is recommended that China collects similar congestion
fees (from parking or moving vehicles) or impose progressive fees on
vehicles according to the level of their emission, and use the revenue
so generated for construction and maintenance purposes in the low
carbon transportation sector.
2.3.3 Transfer Payment
Transfer payment, in a broad sense, refers to the government’s behaviour
in allocating the fiscal revenue to the particular areas of expenditure.
The current transfer payment model between the central and local
governments in China is characterized by a uniform collection of fiscal
revenue in the first place and distribution of the revenue to the local
governments or SOEs in the second place. Therefore, transfer payment
can be seen as an important source of funds for the local governments’
low carbon financing. A form of the transfer payment which supports
low carbon financing of the local governments is the development
subsidy by the central government, inside or outside its budget. As
a reward, the local governments or the project developers undertake
to maintain the use fee of the facilities developed at an appropriate
level recognized by the central government, so as to provide cost-
effective, low carbon urban services. For example, South Korea began
to implement its First Five-Year Action Plan for Green Growth in
2009. The plan gave a subsidy of about 20–30 per cent of their project
expenses to green urban development projects (undertaken jointly
by the public and private sectors); this figure however might rise to
50 per cent for rail transportation projects, and even 50–80 per cent
for environmental protection service projects. Such transfer payment
models characterized by central collection and payment is relatively
easy to manage. The transfer payment of the central government
needs to better match the low carbon urban development projects and
better coordinate with the funding of the local governments in both
time and space, so as to maximize the effect of fiscal expenditure. It
is recommended that China experiments with a joint coordination
Chapter 2 Innovative Financing for Low Carbon Development 93
for taxies as surcharge. Meanwhile, the tax credit given to garages in
this area was cancelled. In addition to these measures, Singapore and
Milan levy additional high emission fees for vehicles with a high level
of emission. With respect to the use of fees collected, London applies
the congestion fee to the development of urban public transportation
means. Finally, New York and Los Angeles impose even higher parking
fees in the highly congested areas, which effectively lessened traffic
congestion. It is recommended that China collects similar congestion
fees (from parking or moving vehicles) or impose progressive fees on
vehicles according to the level of their emission, and use the revenue
so generated for construction and maintenance purposes in the low
carbon transportation sector.
2.3.3 Transfer Payment
Transfer payment, in a broad sense, refers to the government’s behaviour
in allocating the fiscal revenue to the particular areas of expenditure.
The current transfer payment model between the central and local
governments in China is characterized by a uniform collection of fiscal
revenue in the first place and distribution of the revenue to the local
governments or SOEs in the second place. Therefore, transfer payment
can be seen as an important source of funds for the local governments’
low carbon financing. A form of the transfer payment which supports
low carbon financing of the local governments is the development
subsidy by the central government, inside or outside its budget. As
a reward, the local governments or the project developers undertake
to maintain the use fee of the facilities developed at an appropriate
level recognized by the central government, so as to provide cost-
effective, low carbon urban services. For example, South Korea began
to implement its First Five-Year Action Plan for Green Growth in
2009. The plan gave a subsidy of about 20–30 per cent of their project
expenses to green urban development projects (undertaken jointly
by the public and private sectors); this figure however might rise to
50 per cent for rail transportation projects, and even 50–80 per cent
for environmental protection service projects. Such transfer payment
models characterized by central collection and payment is relatively
easy to manage. The transfer payment of the central government
needs to better match the low carbon urban development projects and
better coordinate with the funding of the local governments in both
time and space, so as to maximize the effect of fiscal expenditure. It
is recommended that China experiments with a joint coordination
Chapter 2 Innovative Financing for Low Carbon Development 93
