A Study On The Theory And Policy Of Incentives In The Regulation Of Environmental Pollution

China is facing unusual severe environmental pollution, which has undergone profound changes in type, structure and region, with a total amount of pollutants exceeding the capacity of environment and constant occurrence of major cases of pollution. The concentration of obvious"complex"problems of environmental pollution in the lower stage of economic growth has endangered the foundation of the sustainable national development. The current essay, starting from the perspective of regulation theory and with the emphasis on the incentive of regulations of environmental pollution, focuses on three aspects: why is it necessary to reinforce the incentive mechanism and policy system for the perfection of regulation of environmental pollution? What are the specific contents? And what type is suitable to China? With the information structure, restrictive terms and feasible tools of regulators and regulation targets, the behavior and optimum consideration of both sides are analyzed, and the incentive for environmental pollution regulations is researched genetically. The paper, consisting of four parts and eight chapters, based on which a complete framework is composed on the basis of the combination of theory and practice to actively cope with and settle the serious problem of environmental pollution.Part I is composed of three chapters, focuses on theoretical survey and development. The first chapter, the Introduction, demonstrates the reason for and meaning of this research, states relevant researches both at home and abroad, and introduces the main contents, structural framework and novelty of the paper. Chapter 2 states regulation, the intentional definition and relevant theories of environment and environmental pollution. It demonstrated through the negative externalities of environmental pollutions and the public property nature of environment that the application of regulation theory to the prevention of environmental pollutions is the internal needs for the perfection of market economic system. Chapter 3 is a brief demonstration of the incentive theory and its application, focusing on property ownership, asymmetric information, efficient level of pollution, and the effective arrangement of overall cost, PPP and its extensions, demonstrating the basic principles and main contents of the incentive theory, and ascertaining the logical relationship therein. The incentive theory of environmental pollution regulations is a whole set of mechanisms and approaches relevant to environmental property rights and for the purpose of settling the asymmetric information prevalent in the regulations by realizing environmental effectiveness principle on the efficient level of pollution. The incentive function may bring in more efficient internalization of the negative externalities of pollutions. Polluter pays principle and its extensions are the basic principles reflecting the making of environmental policies in the incentive theory. The chapter also analyzed cases of"the Japanese experience of compensation for social effects of pollution"and"the PPP theory of Japan."Part II is made up of Chapters 4, 5 and 6, validating the combination of theory with practice. Chapter 4 deals with the incentive theory and policy in price regulations consisting of pollution charges, environmental taxation and environmental subsidy. In nature the theory is to introduce the price of environmental resources into the pricing system by charging the polluters for their negative or positive externalities so as to efficiently utilize the ever shorter resources. This chapter uses the cases of"subsidy plans of American state governments to promote the comprehensive exploitation of resources"and"pollution charge system and reform in China"to analyze the practice of pollution charges and its process of reformation. Chapter 5 analyzes the design of trading rules and allowance system, and non-complete competitive allowance market and auctioning, demonstrates the features of this system from the perspective of elements, advantages and limitations and reviews its practice in China. The trading of discharge permit is based on environmental property rights and is the concrete application of Coase Theorem in regulating environmental pollutions. It bears all efficient features of property right incentive. By altering the system foundation of property rights, environmental resources may be efficiently used and stronger incentive is formed for economic main bodies to reduce pollution discharge. The regulation incentive for the trading of discharge permit is applicable to large quantity discharge of homogeneous and heterogeneous pollutants. The chapter analyzes the cases of"the first annual auctioning of sulfur dioxide discharging right in America","experimental cities of atmospheric discharge allowance in China","allowance trading of water pollution in the upper stream of Huangpu River"and"the allowance trading of sulfur dioxide in America."Chapter 6 expounds the economic significance, contents, and scope of application of the regulation of environmental performance bonds, deposit return and publication of environmental information. Responsibility regulation tends to unite private and social costs and introduces an incentive function against any harm to the third party. Performance bonds offer incentive to reduce the possibility of avoiding responsibilities, which is applicable to open mines and other similar cases with large scale destruction and hardly recoverable environments. Deposit refund encourages behaviors favorable to the environment, and is a low cost incentive policy for solid wastes. Environmental information, as quasi public product, is provided compulsorily or charge-free by governments settles the problem of asymmetric information prevalent in the regulation of environmental pollutions, encourages participation and helps polluters correct their behaviors. It analyzes the cases of"security system of mine environment renewal in Liaoning,""the American bottling bill",which serves as a summary and positive analysis of the practice both home and abroad.Chapter 7 comprises Part III. It summarizes the application of the incentive policy in the regulation of environmental pollution in China. It recalls the regulatory changes in this country, analyzes the problems of insufficiencies in its practice makes a generalization and overall evaluation of the incentive mechanism and policy status in this respect, and concludes by stressing the arrival of comprehensive regulation of environmental pollution in time. It is necessary for China now to meet the internal requirements of market economic system and form a complete system soon with maximum overall efficiency.Part VI is composed of Chapter 8. It focuses on the implication of policies, suggesting that the incentive mechanism and policy of cost regulation, discharge permit trading and responsibility regulation be combined to complement each other under the"trinity"framework of a sound system foundation, policy measure perfection, and guarantee reinforcement and bring about participation and incentive compatibility constraints. Strengthening system foundation is mainly to perfect regulation rules and discharging standards of environmental pollution and relevant systems. Perfecting policies refers chiefly to the improvement of price regulation incentive policy, including further reformation of pollution charges, establishment of environmental taxation, and reformation of environmental subsidy policy. Discharge allowance regulations involve mainly setting up paid permit of discharge and discharge trading platform, reinforcing necessary competency construction and ideological training, selecting suitable scope of experiment, and strengthening discharge monitoring. Strengthening responsibility regulations mainly include the perfection of contract guarantee policy in the exploitation of mines, land, and other major resources, the deposit refund system for potential pollutants or reclaimable solid refuse, and overall publication of environmental information. Reinforcing relevant system of security and support mainly refers to the improvement of environment and development of comprehensive decision, deepening the experiment of green national economic system of computation, sorting out the price system of resources, and carrying out the principle of environment friendliness in achievement assessment system.In order to reflect the overall principle of orientation, the current article combines quantitative with qualitative analyses, standard with empirical analyses, and literature arrangement with case studies, and comparison and contrast. It displays its novelty in the following ways:Firstly, the research is attempted from the fresh perspective of regulations. On the basis of regulation theory and the application of the incentive theory of regulations to the environmental pollution prevention, reinforced incentive mechanism is shown to be possible routes and effective measures for the perfection of environmental regulation and the prevention of the worsening environmental pollution under the conditions of market economy.Secondly, the comprehensive use of cross-disciplinary research method. Regulation economics, information and incentive economics, environment and resource economics are combined, complemented with case studies to make positive demonstration of practice summary and policy application so that theory and practice are closely united.Thirdly, systematic incentive policy is demonstrated and put forward. Under the overall framework of reinforcing system foundation for pollution prevention and control, policy means and protective measures, the improvement of incentive policy regulation, discharge allowance trading regulation policy, and reinforced responsibility regulation incentive policy are integrated into a complete system. Fourthly, possible extension of theoretical reference is provided. With the incentive theory and policy of environmental pollution regulations as the background, the essay insists on the coordination of microscopic governmental intervention and market mechanism to fully play their advantages and provide theoretical foundation for efficiently control environmental pollution. Based on internal theoretical associations, it is of similar meaning of reference for the perfection of public product market supply system in China including environmental quality and for the promotion of administrative reform including environmental protection.