Evolution Of Owner Of Environmental Property Rights

Environmental pollution problem roots from the characteristics of environmental resources as public goods and negative externality. Publicity is natural for environmental resources. Due to the vague environmental property rights, the negative externality happens, which finally causes the social cost to be much higher than the private cost, and it also affects the welfare of the whole society. With the development of industry and increase of population, the degree of exploitability and utilization for production and consumption activities changes significantly, hence, the problem of environmental pollution becomes severer and severer, and in the end the pollution exceeds the environmental bear capacity, the environmental resources without pollution or with little pollution becomes fewer and fewer. Therefore, the relative price of environmental resources increases, compared to any other factors of production. Meanwhile, we pay more and more attention to the sustainable development of taking people first. In order to solve the environment problem, it is urgent to avoid the characteristics of public goods and negative externality for environmental resources, to improve the level of welfare for the whole society, and to reasonably and effectively arrange the environmental property rights. Additionally, there is excitation from the high price of environmental resources.There is only public property right for environmental resources, due to its own characteristics of public goods. It is impossible to prevent the free rider problem, and it is unreasonable to ask others to pay related cost or take responsibility. Moreover, as far as any individual or organization concerned, the action of ownership for environmental resources pays much more cost than gaining benefit. Because of the economic benefit and public property rights, it is invalid to arrange the ownership of environmental resources. Hence, it is highly possible to find the solution of environmental pollution problem from the aspect of the owner of environmental property rights, because the base of this problem is the arrangement of environmental resources ownership, but the environment cannot be changed. There are some kinds of property rights equilibrium in productions and consumptions when the usage of environmental resources can be smoothly worked out. However, there is one outcome for the equilibrium, environmental deterioration, which is beyond our expectation.From the viewpoint of environmental resources, the individuals or firms can be divided into two types, environment-friendly parties and environment-harmful parties. If the owner of environmental property rights is mainly occupied by environment-friendly parties, no matter the exact form of property rights arrangement, when the equilibrium reaches, the result of the property rights arrangement is our goal, environment protection. The society can be changed from environment-harmful type to environment-friendly type by the choice of gene for the owner of environmental property rights, including the concept of environment protection, the idea of altruism, the value of environment, etc., which is equivalent to the procedure of biological evolution. This evolution may be caused by government compulsory intervention, or cultural evolution, or individual variation. In general, individual variation is beyond our expectation and control, culture evolution is endless, so government compulsory intervention is preferred to solve our environment problem. Via the transmission channel and mechanism design of formal and informal code and regulation, governments can set up the expected payoff of different strategies, which are affecting the owner of environmental property rights. The evolution of the environment-friendly owner of environmental property rights can be easily achieved if there is a kind of mechanism design from government, where the environment-friendly strategy is the optimized strategy for the owner of environmental property rights.This evolution may take a long time, as there are many factors, such as the old values, the economic profit maximization, the lower-level demands of human and society, etc. However, the evolution time highly depends on the government’s value, determination, implementation capacity, reliability and sense of responsibility. In the short term, the compulsory and formal regulation from government determines the status of evolution for the owner of environment property rights. In the long term, this evolution also depends on the informal institutions and other demands from individual and society. The direction and time of the evolution for the owner of environment property rights can only be assured by the improved demands from individual and society, the interaction of formal and informal institutions.The following topics are thoroughly discussed in this dissertation, including the evolution procedure for the owner of public environment property rights, the required conditions of payoff matrix for game to take action of this environment-friendly evolution. There are seven chapters in the dissertation. The first chapter mainly points out the problem and introduces the concepts. Chapter2to5focuses on the theoretical research. This part includes the discussion of the publicity for the environmental property rights, the set up of evolutionary game model, the analysis of forming procedure of the owner of environmental property rights under the goal of environment protection, the government mechanism design for transmission-channel, criteria, and content. Chapter6focuses on the applied research. Though the analysis of evolutionary game for the industrial pollution in Sichuan Province, the author points out that the optimal strategy is environment-harmful under the current government guidance. This conclusion is consistent to the current situation, and it obeys the economic instinct. Hence, on the basis of theoretical discussion, the government does not take sufficient responsibilities for the evolution of the environmental property rights. It is suggested government take actions and make sure the environment-friendly evolution happens for the owner of environmental property rights, and finally solve the environment problem. Chapter7summarizes the important concepts, creative ideas of this dissertation and further improvement directions in this topic.