A Study On The Price Formation In Circular Economy

Circular economy is a kind of economic pattern which can realize ecological civilization under the post-industrial society, and it is also an important economic development strategy in China. Although we made a lot of progress in the development of circulation economy, actually the price distortions of resources and environment such as the cheap natural resources price, higher prices of renewable resources, and the unreasonable price ratio of resources products and lower costs of waste disposal seriously hinder the circular economy development in our country. There are many research documents on circular economy, but there is little research on the price forming of circular economy. Based on the generalized price theory, this paper uses the method of unifying the standard research and contradictions analysis method and systematically analyzes the price formation in circular economy. There are six charters in the paper. The paper's basic conclusions are following:1. This paper argues that, although market economy represents economy means of industrial civilization, while circular economy represents economic means of ecological civilization, but circular economy is not the complete denial of market economy, and they must be compatible. Because of the differences on humanity hypothesis, rationality assumption, nature of property right, product properties, spillover effect, driving mechanism and operation mechanism between circular economy and market economy, these causes prices formation mutation and exists obvious opposition. But, the economy is the inner motive power of development in circular economy, as the price mechanism is one of the interest mechanisms and it is the main mechanism which can promote development of circular economy. The compatible way between market economy mechanism and circular economy mechanism is to amend price forming mechanism with generalized price under market economy. It presents that through the consummating first and second distribution, it could make the "economic man" into "social man" that are appropriate to ecological civilization and make individual rational compatible with collective rationality; Through the "one right a Lord", it will turn public goods of resources and the environment into private property of the relationships among the responsibility, the right and the obligation; Through taxation and charge can generate the price of public goods; Through giving consideration to both the micro and macro interests, it can adopt tax and fine to the negative externality and financial subsidies, green investments to positive externality of which can make externality into internalization; Through the initial property distribution and emission trading will convert the number signals to price signals.2.With discussion on generalized price theory, it based on the analysis for generalized goods, generalized property, generalized exchange, generalized costs, generalized earnings, it is concluded that the good's usefulness, scarcity, property and monetary are four indispensable factors for generalized price formation. The author believes, distribution is also a kind of exchange, with the purpose of realizing property transactions marketization of resource environmental, property should develop from "one thing, one master" to "a right a Lord" development; in addition to considering the cost of traditional sense of price formation, it should also include the environmental cost, intergenerational costs, its earnings should include both traditional sense of economic benefits and social benefits and ecological benefits. Through analysis and demonstration, it indicates that the generalized price theory not only can accommodate various price relationship in circular economy development, but also provide theoretical basis for adopting all sorts of monetary methods in the development of circular economy and Provide the possibility for adopting a "price combination of boxing"3. This paper based on the generalized price, through the analysis of the absolute scarce, the externalities of space and time dimension, special value attributes and its difficulty of monetization of resources and environment, there exists "five difficult" such as much more difficult to judge scarce degree in resource environment, to define property right and it is also difficult to judge the value measurement, externality currency and price-comparison arrangement during the period of price forming. The approach to solve these "five difficult" should depend upon generalization of price formation, that means generalization of price forming principle part and object part, price forming target and price forming method, it should adopt the price forming mechanism such as "market-oriented, government regulation, social participation, lay equal stress on justice and benefit". It can be realized various resources environment prices through the different price forming subject such as Py (primary resource price), Pz (renewable resources price), Pp (emission price), Pr (the resource tax), Ph (environmental taxes), Pq (other taxes), Pb (financial subsidies), Pf (fine), PI (green purchasing), Pj (fund), Pe (deposit).4. From the material flow and value chain perspective, this paper analyzes the different levels system of circular economy, namely enterprise level, community levels, social level and international level, It is indicated that between the upstream and downstream firms, the cooperation is win-win situation, competition is loss at both sides, only through consultative pricing it can achieve a higher price, the biggest profit. In community circulation level, autonomy is the important conditions to realize waste utilization in community, and only by the self-discipline mechanism from members of the community and by Autonomous pricing can be helpful for waste classification and dispersed waste concentration. What the social level circular is to develop renewable resources industry, turn "urban garbage" to "urban mining". To achieve this goal, only by "visible hand" and "invisible hand" is not enough, we should adopt the participating pricing. In international circulation level, based on the analysis of the relevant case and the international relations theory of "national also is a person", this paper expounds the international circulation cooperation pricing and its realization.5. Based on the generalized price theory, the paper analyzes the micro basis, market system, technical support, government policy of price formation in circular economy. From microcosmic respect, the price formation under rational economic man, on the one hand, it is resulted from promoting competitive advantages of enterprises, on the other hand, it is resulted in promoting generalized price means from enterprise to government; Under the perspective of "social man", the influence to circular economy price forming is including enterprise initiative to promote the price formation of green products under market mechanism, promote property clarity of resources environment and establish deposit system. It is a foundation for the price formation of resources and environment to establish and perfect the market system, only when property rights is defined, property right is commercialized and exchanged by means of market transaction, thus enable property monetization on resources environment. Technology is an endogenous driving force of economic development, technology innovation can change supply and demand relationship, enhance the competitiveness of enterprises, reduce transaction costs, consequently it can be closely related to the price formation in circular economy. Industrial policy, fiscal and financial policies, import and export policy, statistical accounting policies, laws and regulations can influence the price formation in circular economy; there are both direct and indirect effects. Some policies, such as taxes and subsidies, the reward, green purchasing etc, is itself part of the generalized prices, some policy or laws and regulations related to the property definition and the trade of resources and environment.All these policies have been affecting enterprise cost, profit and supply and demand relationship of product market. The government policies of accelerating price formation in circular economy include financial subsidies and direct investment, tax policy, monetary policy, the government green purchasing system, green import & export system, green GDP accounting system and statistical system, legal system, the direct means include resources environment tax and royalty, deposit returned system and special allowance as well as indirect means of property, licensing deals, cross-border ecological compensation and creating recovery network, it also include regulatory measures of standard, ban, quota and license, also has a propaganda, information disclosure and encourage participation in participatory measures.