Study Of Energy Saving And Emission Reduction Incentive Mechanism Based On The Agency Theory

Establishing a long-term incentive mechanism is an important means for government to promote enterprises’ action of energy conservation and emission reduction to achieve green development.Considering of information asymmetry, the government’s risk aversion, environmental benefits, this paper establishes several principal-agent models under diverse conditions based on the Principal- Agency Theory to research the problem of enterprise energy saving and emission reduction incentive mechanism combined with model analysis, chart analysis and other methods.Firstly, in order to analyze the influence of external factors on energy conservation incentives, this paper established principal-agent models under the information symmetry case and asymmetry case to explore the questions that how do the factors such as asymmetric information make a difference to the incentive mechanism, results of this part provide some advices to government policymakers. Secondly, to balance government benefits and environmental benefits, an important conclusion is achieved: the optimal incentive mechanism of energy saving and emission reduction is a dynamic evolving process which follows the trend of enterprises’ s environmental learning curve. Finally, through data fitting of the C hinese environment statistic number from 2006, the validity of the results from this paper and C hinese enviromental policies is attested at the angle of theoretical and practical, so as to provide recommendations for China’s future development of energy saving and emission reduction policies.