| How to solve the environmental problems that are caused by negative externality has had a special place in applied economics since 1920,when pigou suggested the use of taxes or subsidies on external effects to correct market failure. Especially in the 1950-60s when environmental economics became an emerging branch of economics, there have been appeared an extensive theoretical literature on environment policy. However there are also a number of arguments on how to choice the environment policy to solve the more and more serious environment problem both in theory analysis and in practice. This paper's research on environment policy from the view of economics temp to solve three problems: What type of environment policy is more effective? Why the more effective environment policy had not been applied widely? How to choice the environment policy to solve the difficult problem of environment in the period of transition in china? The first two problems are on the basic theory of the choice of environment policy and the third problem temp to put the theory into the practice of environment protection in china. All the analysis centered on the three problems is consisted in the six chapters of this paper. Chapter one is introduction. It offered the background of the paper, the logic structure of the paper, the analysis method of the paper, the main issue of the paper and a literature summery on the theory of environment policy. It also offered the theoretic precondition and the analytical foundation of the paper. Chapter two compared the different types of environment policy with economic analysis method. Firstly, It compared the static economic efficiency of the environment policy: that is the cost difference of the different types of the environment policy when they achieve the same goal of environment protection. Secondly, it compared the dynamic economic efficiency of the environment policy. This involves the actions encouraged by the different types of environment policy in the longer run, that is the difference to encourage the new environment-saving technology's adoption and innovation by different types of environmentpolicy. Then, the angle of view is focused on the environment policy's distributional effects, and it studied the difference of the distributional effects of different types of policy. Lastly, it compared the performance of environment policy in the condition of uncertainty. The purpose of this chapter is to illustrate the principle and the characteristic of the different types of environment policy, which is also the precondition that we evaluate and choice the environment policy. Chapter three analyzed the criteria that might help influence the choice of environment policy. We defined a set of dimensions along which the environment policy may be easy to judged for "good" or "bad". The dimension include: the criteria of cost-benefit analysis, the criteria of cost-effective analysis, ease of monitoring and enforcement, information intensity, flexibility in the face of economic change, and political considerations etc. Following the base of analysis, we discussed the theme on the combinations of the environment policy father. This is also the basic conclusion on the choice of environment policy that we find in the chapter. Chapter four discussed the mechanism of environment policy choice. The purpose of the chapter is to explain that how the environment policies are selected by the policy-maker. Actually, it answered the second core problem that the paper temp to solve. It also explained the reason why the more efficient environment policy didn't be adopted by policy-maker. Firstly, we review simply the advance of the positive theory of environment policy choice. Then, we set up a frame of market-analysis that integrated all the related theory. Lastly, we extend the positive analysis of environment policy from "static" dimension to "dynamic" dimension. Thus, not only it explained the reason of the formation of environment policy, but also it is useful for us to understand the ev...
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