Study On Promotion Of Incentive Compatible Mechanism In China’s Ecological Compensation

With the rapid growth of China’s economy, ecological crisis is increasing constantly. How to deal with contradiction between economic development and ecological protection has become a problem to be solved in our country’s future sustainable development. The purpose of this study attempts to establish an incentive compatible mechanism, which could unify two goals of economic development and ecological protection. In order to achieve this purpose, the article discusses economics theory of ecological compensation, current conditions of ecological compensation and incentive compatible ecological compensation mechanism design, and puts forward ecological mode according to actual situation in the case of returning farmland to forest.The article chooses Binary Value Theory to illustrate human and nature create value together as theoretical foundation for ecological compensation. The theory said that human and nature are two most basic factors of production. Anything has been consumed in the production process need to be compensated to support sustainable social production. Compensation for natural resources (including ecological environment) is the essential meaning of ecological compensation. As the theoretical basis of ecological compensation, Binary Value Theory provides logical consistent thought and method from economics theory of ecological compensation to mechanism design and actual operation level. After explaining the problem of ecological compensation in economics basic theory, the article generally analyzes China’s current situation of ecological compensation and summarizes achievements and existing problems in different types of ecological compensation through study on mineral resources, natural reserve areas, main functional regions and drainage basin ecological compensation mode. With the introduction of incentive compatible theory and mathematical model, using game analysis method to research client (the government) and agent (the farmer) choosing behaviors, then establish incentive compatible principles of ecological compensation. At last, using survey data to empirically analyze incentive compatibility in current returning farmland to forest ecological compensation and comparing government and farmer’s costs and benefits in returning farmland to forest action back and forth, the problems in actual mechanism operation have been summarized. Through the direct and indirect financial, material and other mental compensation from government, farmer’s ecological awareness has been improved. At the same time, farmer and government’s goal are consistent that achieve the purpose of incentive compatible compensation mechanism design, which could maintain the sustainability of ecological service function. Research suggests that ecological compensation should give full play to the role of market for resource allocation in the process of concrete implementation, utilize administrative and marketable methods coordinately, generalize returning farmland to forest incentive compatible mechanism to other ecological compensation mode and establish mechanism extensively in applicable scope.