Research On Operational Mechanism Of China's Environmental Protection Industry

Research on Operational Mechanism of China's Environmental ProtectionIndustryThe dissertation consists of five chapters:ChapterⅠIntroductionBased on elaboration of background and significance of the research, review ismainly made about relevant concepts and theoretical achievements, relevant domesticand foreign research achievements are sorted, introduced and analyzed andforward-looking reflection is made. The first part of this chapter is based on theresearch on operational mechanism based on industry consisting of two aspects.Firstly, it is research on the functions and relations of various economic subjectsinfluencing industrial development as well as the theory and process of the mutualeffect and influence. Secondly, it is to verify whether the changes in objectiveeconomic variables are in conformity to the social and economic goals set in systemarrangement, and to modify the behavior of relevant economic subjects throughmodifying relevant items of system arrangement, thus to make the objective economicvariables more effectively approximate to the social and economic goals. In the latterpart of this chapter, main argumentations, research thoughts, innovation andlimitations are proposed.ChapterⅡOperational Mechanism of Environmental Protection Industryin Major Developed CountriesThe operational mechanism of environmental protection industry in threerelatively developed countries and regions is elaborated, namely, the US, Japan andEurope. The operational mechanism of environmental protection industry in the US:various environmental protection policies and encouragement mechanism launched inthe US play an important role in the development of the entire environmentalprotection industry and the experience may be used for reference. Firstly, feasible policies and measures shall be established in the early and middle term ofdevelopment of the environmental protection industry. It is mainly to directenterprises on the level of strategy to create and continuous stable developmentsituation and tamp the foundation for the development of environmental protectionindustry. In this way, the favorable pattern for development of environmentalprotection industry will be essentially developed with policy promotion and systemguarantee. Secondly, it must be kept in mind that the establishment of various policiesfor environmental protection industry should be based on market factors and marketmechanism and follow the rule of market economy. Action simply based ongovernmental behaviors and administrative orders should be avoided as economicactivities will be punished if the governmental behaviors are against market. Finally,the function of fiscal leverage shall be brought into full play to make fiscal policiesplay the role of regulation. In particular, government should have supporting measuresfor fiscal support policies to encourage enterprises to promote the development ofenvironmental protection industry.The operational mechanism of environmental protection industry in Japan. It ismarket oriented, with compulsory government policy take to promote thedevelopment. Japan attaches greater importance to promoting the development ofenvironmental protection industry through the rigid means of legislation, with theemphasis put on technological innovation; and later Japan's industrial policies changeas it realizes the importance of active participation of enterprises. In Japan,environmental protection industry may be divided into two categories in general–oneis science and technology oriented environmental protection industry, mainly referringto various environmental protection products and technologies, and the other isservice oriented environmental protection industry, specifically referring to variousenvironmental protection services. Service orientation is one of the characteristics ofenvironmental protection industry in Japan. In improving the operational mechanismof environmental protection, enterprises of Japan play an important role. Japaneseenterprises are good at making use of the general situation where environmentalprotection industry is vigorously developed in various countries, breaking thelimitation of industry, making efforts in technological innovation, developing newtype of environmental protection equipment based on market demand, trying tooccupy the domestic and international market. On the one hand, it realized profits of the enterprises and promotes economic development of Japan; and on the other hand,environment is protected. It is worth borrowing for reference.In Europe, Britain, Germany and France are three typical countries in thedevelopment of environmental protection industry. The present situation of theoperational mechanism of environmental protection industry in the three countries ismainly introduced, and the characteristics (rigorous laws and regulations onenvironmental protection, environment tax and reducing environmental cost) ofdevelopment of environmental protection industry in Europe are concluded. Based onthat, two major environmental protection policies of Europe are introduced in details,namely, the application of environment tax and the issuance and implementation ofEnvironmental Cost Account Manual of Germany. Both policies are significant forChina to use for reference.ChapterⅢDevelopment and Operational Mechanism of China'sEnvironmental Protection IndustryBudding phase–from the 1960s to the end of 1970s. During this period, theissuance of environmental protection law urged enterprises to attach importance tosafe production, labor protection and wastes treatment. With market demand available,some enterprises started to manufacture dust cleaning, toxicants prevention andsewage treatment equipment. Due to unknown market prospect, the early investmentis in small scale with low variety and quantity. In spite of that, China's environmentalprotection industry has started to grow and the environmental protection market hasalready been primarily established.Primary development phase–the 1980s. During this period, the development ofChina's environmental protection industry showed great regionality, mainlyconcentrated in regions intensified with heavy industry such as Southeast and NorthChina. The environmental protection industry was mainly the manufacturing ofenvironmental protection equipment for control of industrial dust pollution, waterpollution and atmospheric pollution. In 1988, the national investment inenvironmental pollution control was CNY7.4 billion and the production value ofenvironmental production industry that year was CNY3.8 billion. Most environmentalprotection enterprises were small-scaled with low technological level.Rapid development period–the 1990s. Entering the 1990s, the Party Central Committee and the State Council attached great importance to the development ofenvironmental protection industry. With a series of laws and standards onenvironmental protection issued and implemented, the environmental pollutioncontrol enhanced, policies and measures formulated to encourage and support thedevelopment of environmental protection industry, China's environmental protectionindustry started the rapid development period. By the end of 1998, the productionvalue of China's environmental protection industry reached CNY52.17 billion, withthe profits of CNY5.8 billion realized. The integral scale of environmental protectionindustry was formed and developed rapidly.Continuous stable development period–beginning of the 21stcentury until now.Through over 20 years'reform and opening up, China has gained great achievementsin economic growth, with the gross economic volume rising year by year. However,many environmental problems are hidden behind the economic growth. To realizeimprovement in gross economic volume, local governments prefer heavy andchemical industries; enterprises lack the sense of social responsibility, with theshort-term environmental protection behaviors just to deal with the inspection byenvironmental protection departments; the citizens'sense of environmental protectionis insufficient, in lack of initiative for environmental protection. Entering the newcentury, China has strengthened pollution control, reducing the discharge of majorindustrial pollutants. It shows that pollution control in China has entered a new phase,transformed from passive control in the past to active prevention with beforehandprevention enhanced. The development of China's environmental protection industryhas started a new page. Generally speaking, however, the environmental protectionundertaking of China is still led by government and promoted by policies, and themarket mechanism has not been established yet.ChapterⅣProblems Existing in the Present Operational Mechanism ofChina's Environmental Protection IndustryFirst of all, three difficult problems are proposed, including the problems that thegovernment must provide nearly unlimited market demand with limited resources andthat the government needs to solve nearly countless environmental issues with limitedcapacity. Secondly, passive environmental protection by enterprises is analyzed. Asthe government takes compulsory means to change the rational behaviors of ordinary enterprises, such enterprises are forced to adjust the existing production modeaccording to the intent of the government, adopting the production mode of high costand low pollution. However, if such compulsory means fail to be effectively carriedout, the enterprises, motivated by the rationality of economic people, will definitelyadopt the production mode with even lower cost and more serious pollution, whichwill result in the problem of"high cost in law abiding and low cost in law breaking".Thirdly, the issues of market regulation in government oriented mechanism arediscussed. Firstly, on the market of environmental protection, the demand side is inlack of competition; overcompetition exists on the supply side; and the buyer's marketis monopolized. That is highly likely to generate cut-throat competition and renting,definitely resulting in low efficiency of resource allocation.ChapterⅤReform on The Operational Mechanism of China'sEnvironmental Protection IndustryIt is to reform the traditional operational mechanism of environmental protectionindustry led by government, establish the market-based operational mechanism ofenvironmental protection led by market transaction and assisted with governmentregulation. Firstly, the goal of reform on the operational mechanism of China'senvironmental protection industry is clarified from such perspectives as subjectestablishment, investment and financing system, operation management, industrialstructure and market capacity of environmental protection industry. Based on that, theimplementation path for the operational mechanism of China's environmentalprotection industry is established to distinguish the respective functions ofgovernment and market in the development of environmental protection industry. Thestimulatory function of government for the market demand of environmentalprotection industry is clarified, and the function of government is proposed inestablishing laws and regulations on environmental protection and improving policysystem for environmental protection industry. It is also pointed out that consideringthe particularity of environmental protective products, the government is required tohave macroeconomic control over the overall administration of environmentalprotection industry. To promote the healthy development of environmental protectionindustry, the tasks of government also include standardizing and binding thecompetition behaviors on the market of environmental protection industry,maintaining general interest of the industry while ensuring reasonable and orderly protection accidents arising unexpectedly are defined within the administrationfunction of the government. Secondly, the function of market is clarified in theoperational mechanism of China's environmental protection industry. Investment andfinancing mechanism is required to operate based on market to raise fund fordevelopment of environmental protection industry through multiple channels and toensure the investors to get appropriate return. Besides, the market-based operationmode of environmental protection industry is further proposed, includingenvironmental protection facilities and programs. While the responsibilities ofgovernment and market are defined, it is also pointed out that the environmentalprotection enterprises need to improve and develop themselves continuously to realizehealthy development of market through industrial strength, including markettransaction, competition, public participation and enterprise efforts. Finally,suggestions for measures to be taken to promote healthy development ofenvironmental protection industry are put forward from the perspectives ofadministrative obligations of environmental protection authorities and preventingpower renting.