China's Economic And Ecological Development Incentives

Since the industrialization, human material wealth has been growing rapidly as well as the development level of economy. However, the pollution to the environment got more serious and badly damaged the ecology. It has been a heavy price to pay for the development of human beings. The harsh realities are warning us repeatedly: the only way to maximize human welfare is to realize the coordinated development of economy and ecology.In a long period, our country failed to pay enough attention to the ecological protection along with the economic growth. In the planned economy period, various kinds of mass movement, which are against the laws of economic and nature, made catastrophic destruction to the ecological environment in our country. Since Reformation and Opening, our government gradually attached importance to the ecological protection, but in fact, the environmental problem has not been resolved properly. Despite the magnificent achievement of economy, the ecological problem is still a rough task standing before us nowadays. The environmental problems, which appeared in developed countries during more than 200 years industrialization, have emerged in China in a very short period, and they are highlighted at the present stage.At present, it is efficient to systematically use economic, legal technical and necessary administrative measures to solve environmental problem. Because of the imperfect market mechanism, many economic measures, such as taxation, difficultly take incentive effect as they should do. Besides, some mandatory policies cannot have a long-term effect on account of the lack of consideration for incentive matters. In this sense, the study on the incentive mechanism has great practical values for the coordinated development between economy and ecology. That is the background and the reason the thesis comes out.The thesis takes economic theory as analysis framework, comprehensively adopts the knowledge in institutional economics, information and incentive economics, environmental economics to carry out a cross-disciplinary study. It examines the important changes and current situation of incentive mechanisms of coordinated development of China's economy and ecology, and analyses the existing problems from the angles of market failure and government failure. Based on the experiences of the developed countries and the guidance of incentive theory, the thesis suggests that we should combine government intervention with adjustment of market mechanism, and proposes the countermeasures to improve the incentive mechanisms of coordinated development of China's economy and ecology. We should internalize the externalities through more economic measures by the designing of useful incentive mechanism. At the same time, we had better to encourage the motivation of economic agents based on the market signal, rather than just use clear environmental controlling standards and items to limit people's behavior.