A Study On Local Government Behavior Under Gross Control On Low-carbon Economy

At the end of the "11th five-year" plan. There are some incidents of limiting production to reduce emissions which are against the sustainable development strategy. One of the reasons is the assessment to the local government by central. The local government have to game with the central when they implement the policies of the emission of greenhouse, and the local enterprises also conspire with them to pursuit the most profits. How to solve the conflict between the economic development and the emission reduction with the method of low-carbon economy has become the main problem of our country at present period. The key is the relation of the low-carbon economy and local government. This paper analyzes of the interests of the local government and the seeking action on GDP. Then we investigate the relation of the carbon emission and GDP. Based on these, we make a game model mainly between the enterprises and local government to analyze the reason why the limiting production for reduction of emissions generated. The last part gives some suggestion on how to construct the low-carbon economy from the viewpoint of the action regulation of the government.The main reason of limiting production to reduce emission is seeking the maximum benefits of the local government. The policy of energy saving and emission decreasing of the central government must harm the interests of local. We choose the start as the relationship of GDP and quantity of carbon emission. We add the special differences into the former research of the relationship, and compare with it in different areas. The results indicate that the emission of carbon from eastern is the largest, then the central region. The western is the smallest area. For the increase rate of the carbon emission, the eastern area decreases the fastest, followed by the central and last the western region. We can find that the main factor of GDP development is still the consumption of resources. The contribution of the resources consumption will be lower down with the development of economy. The decreasing rate is proportion to the economic level. It is consistent with the law of diminishing marginal efficiency of capital. Overall, the carbon emission of our country relates to GDP on certain extent. This is the reason why the local governments try to pursuit the maximum profits of themselves when the central want to limit the ejection.We start from the specificity of the local governments, and vertically analyze the game action between the central and local governments and the conspiring between local governments and enterprises. We find that the too high regulatory costs lead to the lack of strength of the assessment to the local governments, also the old evaluation form leads to the fraud and conspiring. The game analysis indicates that the central governments must strengthen the regulation and clear the rights of the different level governments. Then the reduction of greenhouse gas is able be done by local governments. The low-carbon economic structure should be introduced at a appropriate time and a long term regulation for reduction should be constructed. These are very important for the strategy development of our country. The governments can improve the carbon tax, and cut down the chain of interests between the local governments and enterprises. In another way, the transactions of carbon emission can be introduced to cut down the costs of emission reduction of enterprises. It supplies another method to develop. The last part of this paper suggests a Regional Clean Development Mechanism (R-CDM) model, which developed from CDM method. It should be constructed on the perfect carbon tax and emission transaction mechanism. The effect is to make the capital and technology flow to developing and undeveloped areas. This is good for the balance of the economy of different regions and meets the requirements of building a harmonious society.