Exists To Avoid The Sewage Charges In The Case Of Fees Model

Until recently, the study of environmental economics and its management strategy has been at the beginning stage in China. However, studying of this field is becoming more and more necessary according to the worsening environmental situation in our country. In this paper, I study the problems by environmental economy policy of charging polluting firms. The assumption is that all the firms are trying to evade the emission charge. Based on this, mathematical models are built to solve the problems under different situations. Study in this paper must be very applicable to further study and practices of making environmental policies and doing theoretical researches for environmental enforcement agency.At present, it is common to see such a problems in the practices of charging polluters: polluters prefer to pay higher money of punishment for their under-reports of their polluting than to reducing their produced pollutants. This situation makes the solutions of traditional models impractical. Because the traditional study is based on the assumption that all the polluters will comply to the charging policy. However, this is not guaranteed. In this paper, we take this into considerations and improve traditional models by assuming that all the firms are trying to evade the emission charge, that is, polluters will maximize their profits in all the ways. If it is possible, they will under-report their emissions to evade charges at the price of risks of punishment (such as paying much higher money, or in other methods). So compared to traditional modeling, models in this paper are more applicable.Models in this paper are built in such a dynamic process: each polluter knows as soon as possible the enforcement agency's policy, including emission charges, audit and monitoring policy and punishing method. Then they decide on both the levels of their true emissions and reported ones. Environmental enforcement agency will charge polluting emissions according to polluters' reports, and in the meantime it will take measures of audit and monitoring policy. Anyone making false report will be punished when he is audited and monitored.The study in this paper stands on the side of the environmental enforcement agency, and all the models' objective is to control the concentration levels in receptors under certain standards in an effective way, so that the whole society's welfare is maximized. Here the whole society's welfare is represented by the sum of all the polluters' revenues. As we know, the revenues of polluters are also the revenues of the society, and charging them for polluting emissions will decrease polluter's profits but increase authority's income. So this representation is reasonable.First of all, this paper discusses the charging models when the environmental enforcement agency gets complete information of polluters' revenue functions of their emissions, and the probability of audit for each polluter is a constant. The study proves even if the audit pressure is not strong, and the objective of enforcement agency is only to control the environmental condition not the polluters' compliance, some proper charging policy can be worked out to maximize the whole society's welfare and satisfy the environmental target, when the punishment function is defined and not changed.Then two extended models are studied, both of which are more applicable and sensible. The first model assumes that the audit probability for each polluter is other than just a constant but a stochastic variable, which is independent from each other and shares the same distribution function. Then a conclusion is achieved: the expectation of polluters' true emissions will decrease with the increasing charging for per unit pollutant. The second model makes the assumption that the enforcement agency is in the face of uncertain information on pollution revenues of polluters. This paper refers to the method of Yuri Ermoliev, Ger Klaassen and Andries Nentjes, who do not take into considerations of polluters' non-compliance behaviors, and a trial-and-error procedure will be used. Study proves that if auditing and monitoring pressure for polluters are strong enough, the optimal charging policy can be achieved, even if polluters are still very likely to under-report their emissions. But if the pressure is too weak, with incomplete information, agency cannot use this method to achieve the optimal policy and ensure the desired pollution level at receptors.