| River valley ecological compensation is an important to keep economic balance,maintain sustainable development，and to realize social fairness. Three gorges reservoirarea, as important ecological barrier area of Yangtze River valley, has a direct impacton local economy development and living standards and cost of production indownstream area with its environmental status. This study focuses on how to coordinatethe relationship between local economic development and ecology conservation, as wellas on how to promote water pollution management in Three Gorges Reservoir and itsupstream.This study starts from summarizing and classificating the present situation of waterpollution in the Three Gorges Reservoir. Based on analyzing the water pollution risk,the most serious water pollution issues are concludedinto three aspects, which areindustrial wastewater discharge, agricultural non-point source pollution andcross-border water pollution.First, Ecological compensation mechanism, as a restriction to upstream area, isestablished to overcome the dilemma of transboundary water pollution dispute. Underthe restriction of ecological compensation, the special issues about how the upstreamgovernment manages non-point source pollution and point source pollution arediscussed.The paper suggests the design of the ecological compensation mechanism forfarmers, in order to overcome the serious agricultural non-point source pollution.Mechanism that integrates small-loans with the Eco-compensation is designed not onlyused to alleviate agricultural non-point source pollution, but also to overcome farmerhouseholds’ difficulty in financing. Resources behind the original ways of using,promoting agricultural production technology and farmers to raise the level ofproduction and life.Third, this study reveals the way of how Eco-compensation Mechanism influencespollution abatement decision of upstream area government by stochastic differentialgame. This paper applies a Stackelberg stochastic differential game and a cooperationstochastic differential game involving local government and industrial sector.Finally, also under the transboundary ecological compensation mechanism, thisresearch shows how the government policy guides the enterprise to make the technology upgrading investment strategy and improve the environment of the area.The conclusion of this paper involves several aspects as bellowed:①According to the transboundary pollution problem, this paper suggestsestablishing a transboundary ecological compensation mechanism. By analyzing, thispaper sticks to the point that AFOA can be used to decide the Ecological compensation.②The paper suggests the design of the ecological compensation mechanism forfarmers, in order to overcome the serious agricultural non-point source pollution. Themain source of pollution in Three Gorges reservoir is agricultural non-point sourcepollution. Mechanism that integrates small-loans with the Eco-compensation is not onlyused to alleviate agricultural non-point source pollution, but also to overcome farmerhouseholds’ difficulty in financing. Based on a qualitative analysis, this studyestablishes a game model, and proves that a proper punishment mechanism for breachof contract and interest subsidization can reduce the farmer households’ moral hazardand adverse selection. Without changing the other conditions, the introduction ofinterest subsidization can increase the coverage of the ecological compensationmechanism, as well as improve social welfare and ecological protection efficiency.③This study reveals the way of how Eco-compensation Mechanism influencespollution abatement decision of upstream area government by stochastic differentialgame. This paper applies a Stackelberg stochastic differential game and a cooperationstochastic differential game involving local government and industrial sector. Byanalyzing and comparing the Nash Equilibrium, this study offers the underlying reasonfor the phenomenon why local government tends to collude with enterprises, and thenmake some suggestions to overcome this problem.④Except for collecting pollution tax, local governments can also guideenterprise technology upgrade and equipment modification to achieve pollutionemission cut target by formulating reasonable policies. Ecological objective promoteslocal government who is in a reservoir area adopting new environmental policies,which also encourage firms to save energy and reduce emissions. Based on realoption theory, this study characterizes the arrival of new environmental policy as aPoisson jump process. Under the situation that neither the policy arrival time norcontents can be determined, with the real option theory, this study focuses on offeringsuggestions for firms to decide best investment timing and scale, providing thecumulative probability distribution function of investment timing, and giving anumerical analysis. By analyzing the relationship between policy and investment decision, a perverse result that the high subsidy does not always encourageinvestment all the time is found, which can be a valuable reference for government tocontrol industry pollution and make reasonable policies.The innovation spots of this paper are listed as bellow:The first is suggesting a creative design for ecological compensation mechanism.Mechanism that integrates small-loans with the Eco-compensation is a new conceptionof ecological compensation. A new attempt in mechanism designing is quantity analyseto the influence of ecological compensation on transboundary pollution usingmathematical model.Second, stochastic differential game is established in Continuous time to analyzethe decision making of players under the background of ecological compensation. Theseplayers include local government and enterprise. The paper is not limited toenvironmental policy itself, but also considers the rational reaction of players facingenvironmental policy. This paper tries to simulate the actual reactions of humanbehavior, and provides theoretical basis of reasonable policy suggestions.The third one is the new discovery in the conclutions. The model gives aexplanation that rapid development of economy is always accompanied by highpollution. |
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