Levying of Ecoenvironmental Compensation Fees in China: An Analysis and Proposals

In addition to estimating the total amount of the ecoenvironmental levies, the article analyzes the fee's quantitative effects on the government's major price indexes. Assuming fee collection started in calendar year 1998, total revenues collected by the end of the year 2000 are estimated to range from 6.68 billion Renminbi (RMB, unit of money used in China; 1990's comparative value, the same thereafter), 12.6 billion RMB, to 18.6 billion RMB, depending on the fee rate in question. The revenue collected in this way would, if used to finance environmental reclamation projects, greatly improve important parts of China's endangered environment. Moreover, our calculations indicate that fee collection would likely not lead to significant price fluctuations.