Research On Environmental Policies And Environmental Protect Industry Of China In Game Theory Perspective

With the mention of China’s sustainable development strategy, the problem ofenvironmental pollution and the development of environmental protection enterprisesare highly valued. Theoretical research and practical experience abroad shows thatsewage charges is an effective means of pollution control. However, sewage charges,our government environmental and economic policy instruments did not play asignificant effect on control the behavior of polluting industries. Polluting industriesstill emits a large number of pollution and did not control it. It leads to lack of marketfor environmental protection industry. Therefore, it has important theoretical andpractical significance for polluting control and development of environmentalprotection enterprises to identify why the effect of sewage charges policy did notwork and then seek a new setting standard for sewage charges.As with negative environmental externalities, individuals and businesses have noincentive to control pollution. It is necessary for government intervention to controlpollution. Government, polluting industries and environmental protection enterprisesare rational individuals, and their interest objectives and decision-making behaviorinfluence each other. And then we can use game theory means for analyzing theiractions. This article analysis the strategy of government and the polluting business，then establish complete information static game model between government andpolluting companies. Solve the model under pure strategy and mixed strategy Nashequilibrium solution. The equilibrium results show that when sewage charges are lessthan the cost of government regulation of environmental pollution, the governmentwill don’t choose regulatory. Even if the Government chose to monitor the polluting enterprises, sewerage companies will choose to increase production of the sewage,and turned over to the sewage charges. It is because that the increased revenue byimprove production is more than sewage charges increased by the increment of theenterprises sewage. Sewage charge is just the punishment of polluting behavior forpollution enterprises, and contamination has not been reduced. It shows that ourcurrent sewage charges formulate is unreasonable and the low level of sewagecharges is the main reason for its unobvious effect.Thus, this paper takes the environmental protection enterprises as the gamesubjects to join in the game model. It analysis the interests of mutual influencerelationships among them and the mechanism of sewage charges by the constraints onthe behavior of polluting industries pass to the interests of environmental protectionenterprises. The tripartite complete information static game model is establishedamong government, polluting industries and environmental enterprise. In the gameprocess, the government takes social welfare as the interests of the target to determinethe size of the sewage charges; polluting industries and environmental protectionenterprises maximize their own interests as the goal to determine the yield ofproduction strategy. Solving the model, we draw a tripartite decision variable values.We draw two useful conclusions for the standards of sewage charges in China anddevelopment of the environmental protection industry. First, It concluded that returnof environment protect industry have quadratic function relationship with thegovernment’s sewage charges. That is to say, the development of the environmentalprotect industry relied on government policy. Meanwhile, government environmentalpolicies promoted the development of the environmental protect industry. Second, thesewage charges derived from the game of the government who took social welfare asinterest objectives and sewerage companies equaled to when environmentalprotection enterprise pursuit of maximizing their own interests. Namely, we canevaluate sewage charges policy effectiveness through the development of the environmental protection industry. As long as the government encouraged andpromoted the development of environmental protection enterprises, it can achieve theoverall welfare society.