Investment Analysis Of Environmental Cost Internalization Project Based On Stakeholder

ABSTRACT:As environmental issues become more prominent, environmental cost internalization as an effective way to solve the conflict between economic development and environmental protection, is more and more been widely cognitive. How to effectively encourage enterprises to internalizing environment cost when making the investment decisions is always an important problem to be concerned in both academic research and industry. With the introduction of stakeholder theory, this paper selected enterprises, governments, consumers as major stakeholders, and analysed the influence of the environmental cost internalization project on its value increment. According to the periodic characteristics of the project, the comprehensive evaluation model of environment cost internalization project was constructed, as the objective function is to maximize the net present value (NPV) of projects and constraint conditions with demands of consumers and the government. In the early stages of the project, Kuhn-tucker conditions is used to solve the model, and study enterprise’s production, pricing decisions, and the reasonable level of government subsidies. In the developing and stabilizing stage of the project, the entire project’s NPV is evaluated. On the basis of the theoretical analysis above, this paper takes XX new energy automobile as an example, to further confirm that taking into account interests of the enterprise, government and the public, the environmental cost internalization project can still bring positive net present value, so as to create the win-win situation of enterprise, government and consumers, and ultimately to achieve a sustainable development of economic society and environment.