Reasons for Proposal
Reason for proposal
Now, global environment and human survival is threatened by climatic crisis caused by greenhouse gas emission with increased use of fossil fuel since c. Natural disasters such as flood, drought, cold snap, and forest fire and social disasters such as infected diseases, domestic animal infectious diseases, and fine dusts, which have recently become frequent, threaten the survival and health of human beings and are expected to give huge damages to future generation.
Therefore, each country of the world implements active greenhouse gas emission reduction policies such as application of carbon tax with the goal of “carbon neutrality” to make greenhouse gas emission zero until 2050 in order to suppress global mean temperature within 1.5 degree compared with the Industrial Revolution.
Korea also recently declared carbon neutrality until 2050 and has announced greenhouse gas reduction road maps through the previous government but total greenhouse gas emission rather increased from 656.32 million tons in 2010 to 727.60 million tons in 2018 in Korea and OECD countries showed yearly mean carbon dioxide reduction equivalent to -0.5% from 2000 to 2019 in contrast to Korea which showed 2% of increase rate.
Application of energy-related taxes such as transportation, energy, and environmental taxes to some fossil fuel only and application of low tax rates to fossil fuel emitting greenhouse gas in large volumes such as soft coal, hard coal, LPG, and diesel oil, etc. encourages overconsumption of fossil fuel and the industrial structure based on fossil fuel.
Therefore, it is intended to abolish the expiration period of transportation, energy, and environmental taxes to be expired in 2021, to revise the name of Transportation, Energy and Environment Tax Act to Carbon Tax Act, and to tax KRW 55,000 to one ton of carbon dioxide emitted from soft coal, hard coal, LPG, and diesel oil, etc. which have been excluded from taxation after conversion into such units as kilograms or liters, etc. in order to tax KRW 11,000 to one ton of emitted carbon dioxide in 2030.
Main content
A. The name of the Act is revised from Transportation, Energy and Environment Tax Act to Carbon Tax Act.
B. The purposes of the Act are established as achievement of carbon neutrality, preservation and improvement of environment, projects to expand related transportation facilities such as roads and urban railways, etc. and cultivate public transportation, and preparation of funds of the projects to support the energy.
C. Diesel oil, kerosene, LPG, LNG, soft coal, and hard coal, etc. are added to the subjects of taxation and the tax rates prescribed in Article 3 of Supplementary Provisions are applied to the taxation unit thereof (Article 2 of draft).
