Author
Asst Prof Jingyi Wang
Organisation/Institution
The Chinese University of Hong Kong (CUHK)
Country
HONG KONG (SAR OF CHINA)
Panel
Tax Law
Title
The narrow crediting approach of the EU carbon border adjustment mechanism and how China should respond
Abstract
When the carbon border adjustment mechanism (CBAM) adopted by the European Commission becomes fully effective in 2026, it will inevitably affect exports from China and other jurisdictions. The EU CBAM requires that imports into the EU carry a carbon price similar to that of items manufactured within the EU. Although China has a national carbon emissions trading system (ETS), its current carbon price is a mere fraction of that of the EU ETS. This article supports the expansion of CBAM crediting of carbon pricing in third countries by using an effective carbon pricing method that covers both explicit and implicit carbon prices. Two taxes collected in China, resource tax and consumption tax, can be considered as effective carbon prices, which could help reduce the CBAM cost on Chinese exporters. Nevertheless, this article points out that the gap between the EU’s and China’s effective carbon prices will still be significant even after taking indirect carbon prices into account. Advocating the expansion of the CBAM crediting rules can only be a stopgap approach compared with decarbonizing China’s economy.
Biography
Jingyi Wang is an Assistant Professor at the Faculty of Law, the Chinese University of Hong Kong (CUHK). Jingyi’s research interests include tax law, fiscal policy, corporate governance and social-legal studies. Her recent work examines tax law reform in China, the taxation of cryptocurrencies, Hong Kong tax policies and law enforcement in China. Her scholarly works have appeared or are forthcoming in prominent academic journals such as Florida Tax Review, British Tax Review, Australia Tax Forum, Journal of Corporate Law Studies, Journal of International Economic Law, Singapore Journal of Legal Studies, China Quarterly,Hong Kong Law Journal and Asia Pacific Law Review. Jingyi obtained her PhD and LLM from King’s College London and her LLB from the East China University of Political Science and Law.
