The Research On The Applications And Policies Choice Of Economic Instrument In China's Environmental Protection

The biggest side effect of China's rapid economic progress is the over-exploitation of environment and natural resources. Since the call for a harmonious society has been voiced from Chinese Communist Party, it is advised that economic, social, and environmental developments should advances in a harmonious way to promote a resource-saving and environmental-friendly society. The strategy development plan for the eleven"five years"listed a set of indices of protecting environment and saving natural resources, among which, both"the reduction by 20% of natural resources dedicated to one unit of GDP"and"the reduction by 10% of the major pollutants"are enforceable legally. How to protect the environment has become one of major tasks in the new era. Our government and its related institutions have employed various kinds of environmental protection instruments including the ones of administration, law, economic and propaganda. Because the administrative and legal instruments are more actionable and familiar, they constitute the major instruments employed by our country. With respect to the economic instruments often used by developed countries, they are still in the testing phase in our country.The research of the economic instruments on environmental protection requires the analysis of the economic backgrounds and major supporting economic theories. It is found that the deepest cause of environmental problems lies on the fact that it is a public property with externality and unidentified property right, which result in misallocation of environmental resources and market failure. The comparison of functionalities, formats and appraisal standards of different economic instruments is the central concern of this dissertation. Economic instruments include fee, tax, subsidy, credit, marketable permit, deposit etc. The evaluation of economic instruments is a fairly complicated and almost impossible process, which should be conducted from perspectives of environmental assessment, economic cost, and their social and political implications. The thorough analysis of the current situation and the effect of the economic instruments on environmental protection, which applied in our country shows that we are still laggard in this area far behind the developed countries such as EU, US, and Japan. And the current situation requires the empirical analysis. The common methods include regression, relative methods and other related ones, which are efficient in analyzing the relationship between the instruments and their effect. It is found by using these methods that the significant positive relationship exists between the economic instruments and their effect in our country, which means the usage of the economic instruments have made positive contribution to the environmental protection, among which, the pollution fee instrument is most effective, followed by the pollution tax instrument, and the pollution control investment instrument. Furthermore, the economic instruments used in developed countries also give us some important inspirations: first, China requires continued improvement in pollution fee instrument development, but some relative projects require shift from using pollution fee to tax instrument;second, requires utilizing pollution taxation instrument step by step, enhancing the management of the revenue from the this instrument;third, requires reinforcing the supervision ability of legislation and the inspection of the pollution sources, furthermore, china requires prudently implementation of other economic instruments, such as trade of pollution permits.In the new era, China should implement economic instruments to protect environment based on justice and polluter-pay-principle. The actionable choices are threefold: (1)reform and perfect financial taxation and expenditure policies, buildup independent environment tax based on the existing pollution fee and tax mechanism to transform the financial expenditure on environmental protection from transferable-expenditure oriented to purchasing-expenditure oriented;(2)build up green investment mindset, putting forward environment as a major factor into credit decision system and elevate the industrial structure;opening up new financing channel to environmental investment securities;buildup insurance system for environment;(3)adaptive to the trend of raising level of civil pollution, entitle every member of the society with environmental rights, buildup tradable market for environmental capacity usepermission quota , promote people to conclude environment into decision-making process to achieve environmental protection through effective market-oriented resource allocation.