Green Revenues for Green Energy

The report examines how China can transition from relying on electricity surcharges to using environmental taxes and carbon pricing to fund renewable energy. By analyzing eight international case studies, it argues that EFR measures can be pro-growth if revenues are recycled effectively and that earmarking revenues increases transparency and investor confidence. The document suggests that China should consider a carbon tax and natural resource taxes to provide stable, long-term funding for its renewable energy targets, while implementing governance structures to ensure accountability and avoid the 'stop and go' investment cycles seen in some other jurisdictions.

• Environmental taxes and EFR measures do not inherently hinder economic growth; if revenues are recycled effectively, the net economic impact can be positive, with some European and Japanese modelling suggesting slightly higher GDP growth than business-as-usual scenarios.
• Earmarking tax revenues for specific goals like renewable energy increases transparency and public acceptability, although it contradicts the 'non-affectation principle' which favors budgetary flexibility.
• Revenue stability for renewable energy funding can be maintained through adjustment mechanisms, such as quarterly tariff reviews (as seen in Denmark), or by implementing price caps and floors within emissions trading schemes (as seen in Australia and Alberta).
• Policy stability and cross-party consensus are critical for leveraging private finance in renewables, as periodic renewals or political instability (e.g., in the US and Australia) create 'stop and go' cycles that discourage investment.
• Environmental fiscal instruments can coexist with other climate policies; for example, several European countries maintain national environmental taxes alongside the EU Emissions Trading Scheme (EU-ETS).
• Effective management of renewable energy funds requires clear governance structures and political independence to prevent funds from being reallocated to short-term political priorities, as evidenced by concerns over India's Clean Energy Cess.
• China's current funding for renewables relies primarily on an electricity surcharge, but the report suggests transitioning toward natural resource taxes and a carbon tax to meet its target of 20 per cent renewable power generation by 2015.

APA

Cottrell, J., Bridle, R., Yongqiang, Z., Jingli, S., Xuxuan, X., Beaton, C., Leopold, A., Meyer, E., Sharma, S., & Cheng, H. (2013). Green Revenues for Green Energy. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/china_green_revenue_summary_en.pdf

Chicago

Cottrell, Jacqueline, Richard Bridle, Zhao Yongqiang, Shi Jingli, Xie Xuxuan, Christopher Beaton, Aaron Leopold, et al. Green Revenues for Green Energy. International Institute for Sustainable Development, 2013. https://www.iisd.org/system/files/publications/china_green_revenue_summary_en.pdf.

Wikipedia

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BibTeX

@techreport{cottrell2013green, author = {Cottrell, Jacqueline and Bridle, Richard and Yongqiang, Zhao and Jingli, Shi and Xuxuan, Xie and Beaton, Christopher and Leopold, Aaron and Meyer, Eike and Sharma, Shruti and Cheng, Han}, title = {{Green Revenues for Green Energy}}, institution = {International Institute for Sustainable Development}, year = {2013}, month = oct, url = {https://www.iisd.org/system/files/publications/china_green_revenue_summary_en.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }