China is the biggest coal producer and consumer in the world. Ever since the beginning of this century, China has witnessed an annual average growth rate in coal exploitation and utilization of 200 million tons. China’s coal consumption in 2012 has reached 3.62 billion tons, which for the first time makes up more than half of total coal consumption in the world, namely 50.2% .
The current coal production and utilization methods in China have severe impact on the environment,including widespread destruction of land and vegetation, pollution to underground water resources, waste water, mining site subsidence, solid waste, and massive air pollution . A large proportion of PM2.5 pollution , an air pollutant which has recently become something everyone is focusing on, comes from coal burning.
That the polluter should pay is the basic environmental economic principle, but China still has a long way to go to reach it. Though China currently has already implemented some tax policies that are advantageous to the environment, such as pollutant discharge fees, resources taxes and sustainable development funds, in the light of practical environmental destruction caused by coal, these policies are very much insufficient to make up for the real external environmental costs of coal production and utilization.
￼￼In order to calculate the environmental costs of developing and utilizing coal and also to searchfor policies to deal with them, the China Academy for Environmental Planning (CAEP), funded by Energy Foundation China(EFC), has carried out this study.