A Study Of The Optimal Rate On Environmental Protection Expenditure For China

At present,the global environmental deterioration caused by economic development is becoming increasingly serious.It has become the consensus of most countries in the world to find the balance point between economic growth and environmental protection and to achieve sustainable economic development.According to traditional economic theory,environmental protection has positive externalities,so the government is the main driver of environmental governance.However,with the rise of green credit in recent years,the impact of market forces on environmental governance has become increasingly significant.Environmental governance is gradually changing from a single decision-making by the government to a government led and social coordinated model.China has been practicing the strategy of sustainable development for a long time.Therefore,it is particularly important to clarify the relationship between economic growth and environmental quality,to determine the optimal rate on environmental protection expenditure in China,and to formulate policies to optimize it.This paper first discriminates the existence of optimal rate on environmental protection expenditure in China based on the Environmental Kuznets Curve hypothesis.Then the paper estimates the values of the optimal rate under the coordination of government and market from both theoretical and empirical aspects.Finally,based on the difference between reality and theory,the paper constructs an optimal strategy on environmental protection expenditure.Through the research of this paper,the main conclusions are as follows.Firstly,the EKC of China has inverted U-shaped characteristics,and different pollutants have different degrees of temporal and spatial dependence.When the per capita GDP reaches60,000 yuan(2004 price level)or 96,000 yuan(2019 price level),economic growth will no longer be at the cost of environmental quality deterioration,but will promote the improvement of it.At present,the per capita GDP of most provinces in China is far below the inflection point.There is still a dilemma between economic progress and environmental protection.Therefore,there is an optimal rate on environmental protection expenditure to realize the coordinated development of economic construction and environmental protection.Secondly,both government investment and market environmental protection expenditure have an inverted U-shaped effect on the growth rate of China’s green GDP,and there is also an interaction between them.The growth rate of green economy also depends on time and space.The empirical results show that the optimal rate on government expenditure is approximately 2.22% and the optimal rate on market expenditure is approximately 8.20%.Compared with the reality,the government has invested too much and the market has not invested enough.Therefore,it is necessary to build a strategy to optimize the environmental protection expenditure.Thirdly,a government led investment-loan linkage strategy can optimize the rate on environmental protection expenditure.The premise of ensuring the strategy is that the government provides sufficient liquidity compensation to financial institutions,and the necessary condition for the final realization of the optimal rate on environmental protection expenditure is that the financial institutions have strong support capacity for environmental protection enterprises.Therefore,the government and financial institutions need to establish a long-term cooperation mechanism,and financial institutions need to improve investment and financing management capabilities for environmental protection enterprises.Compared with the existing research,the main innovations of this paper are as follows:first,it demonstrates the existence of optimal rate on environmental protection expenditure from both theoretical and empirical aspects;second,it calculates the optimal rate under the coordination of government and market;third,it constructs the investment-loan linkage strategy to optimize the rate and verifies the effectiveness of it through evolutionary game...