China is about to emerge as the world's leading emitter of greenhouse gases, a position the United States has held since 1890. Now is the time for China to take the lead in finding a way to reduce global emissions, which the United States has thus far failed to do. It should start by imposing a sizable tax on the carbon content of its fossil fuel consumption and by heading an effort among other major trading countries to do the same.
China would gain in several ways from implementing a substantial carbon tax. By reducing its fossil fuel consumption, China would prevent the deaths of hundreds of thousands of citizens because of the short- and long-term consequences of air pollution from burning coal. Investments in energy-efficient durable goods, encouraged by a carbon tax, would generate energy savings over the lengthy life of these investments.
The demands of China's rapid economic growth are outstripping the country's ability to provide the infrastructure necessary for continued growth; a carbon tax would slow short-term growth and allow infrastructure investments to catch up. Ultimately, this would lead to greater long-term growth. If China fears a drag on its economy from the carbon tax, it could make such a tax partially or fully revenue neutral by reducing other taxes....
From the Washington Post