| With the fast development of livestock farming industry in China, the pollution caused by animal breeding is increasingly serious, and even more worsen in the future. It is a must to strengthen the livestock pollution controlling and prevention, for fully implementing the Scientific Outlook on Development, building a new socialist countryside and realizing a harmonious socialist society. The main purposes of this paper are to provide an economic analysis frame for the livestock pollution controlling, to economically evaluate and study the adoption behavior of biogas technique used by specialized breeding households for preventing the pollution, and to propose a green subsidy policy for the specialized households preventing pollution. It contributes to a significant theory improvement and practical instruction.The main methodologies in this paper include normative study, empirical study, farm survey, case analysis and econometric approach. While environment economic policies are studied from the perspective of behavior economics. After concept definition and literature review, following the route of "background-theory-demonstration-policy", this paper consists of five sections. In the first section, it is evaluated the pollution situation caused by animal breeding, and the environmental management status in China, thereby estimated the developing trend of animal breeding pollution. In the second section, it is fully analyzed the economic connotation on animal breeding pollution, from the aspects of property right, externality, pollution optimality and game theory. In the third section, it is expatiated the main technical modes of controlling animal breeding pollution by the specialized households, it is also economically evaluated the biogas engineering set up by the households, from the perspectives of society and households themselves. In the fourth section, it is empirically studied the determinants of pollution awareness of breeding households, biogas techniques adoption decision and degree. In the fifth section, the connotation and functional mechanism of green subsidy policy are explained, and the theoretical base and policy efficiency of applying such green subsidy policy in preventing animal breeding pollution are analyzed in particular.The research results show that: 1) the pollution caused by breeding specialized households is severe, and the management is weak, which the government attaches less importance to; 2) biogas technology, whether from the social or specialized household perspective, is an economically feasible technique to control pollution from animal breeding, and it is a need for the government to subsidize the household for building of biogas facilities; 3) the biogas technology adoption behavior by the specialized household is negatively correlated with variables such as householder's gender, while positively correlated with variables such as householders' knowledge about animal waste and animal health, whether participate in animal breeding associations (ABAs), whether receive governmental subsidy, actual reception of subsidy, breeding scale in the adoption year, etc. 4) there are certain problems existing in the development of rural biogas business, such as small scale of biogas project, lack of technical support, low integrated utilization rate, incomplete subsidy plan, etc. 5) green subsidy policies are the effective tools for preventing animal breeding pollution. The policy implications based on the above research results are: 1) Financial subsidy on biogas facility projects has to be carried on, but the beneficiaries should be extended, while the subsidy rate should be increased. Enough funds should be allocated from the financial budget to support the "first pool building, later subsidizing", and a progressive subsidy of binding the amount of subsidy with the scale of pool building is a good choice, in addition to ensure local matched fund; 2) Subsidy on environmental education in rural areas is needed, to improve biogas household's environmental protection awareness and behavior; 3) Subsidy on environmental protection training program for women in rural areas is needed, to increase their participation in rural public environmental affairs; 4) Financial support for rural animal breeding associations (ABAs) is needed, to strengthen ABAs' roles in environment management of animal breeding; 5) Financial support for agricultural technology extension sector is needed, to give full play of its role in pollution control; 6) Innovation on supporting institution such as property right, administration, laws and regulations, public policies, etc. is also needed. |