Research On The Environmental Effect Of PPP Mode Water Investment From The Perspective Of Green Finance

The construction of water conservancy infrastructure relates to national economy and people's welfare.The water conservancy industry is one of the main industries which government puts emphasis on.At this stage,since processes of urbanization and industrialization in China are accelerating,water pressure for living and production is becoming more and more intense,which restricts the sustainable development of the economy.Long investment cycle and high demand for resources contribute to large financial needs.If all burden is to be borne by the government,there will be heavy financial pressure placed on the nation.As an emerging mode of cooperation between government and social capital,the PPP mode attracts private sector to participate in provision of public goods,which enables private and public sectors to give full play to their respective advantages.As a result,it helps achieve the optimal allocation of resources and maximizes social welfare.The PPP mode is a mode of government and social capital cooperation that is currently being promoted by the Chinese government.The "Guiding Opinions on Further Encouraging the Vitality of Civilian Effective Investment to Promote the Sustainable and Healthy Development of the Economy" issued by the General Office of the State Council(Chinese National Office [2017] No.79)proposes to further stimulate private investment,promote the PPP mode to reduce the pressure of local governments,and utilize new financing methods for sustainable economic development.This organically links the PPP mode with green development.Green finance is inseparable from the PPP mode.Using the PPP mode as a carrier to mobilize and encourage more social capital to invest in green industries is an important step in building a green financial system and promoting environmental improvement,sustainable economic,and social development.This paper first reviews the domestic and foreign research documents and defines the concept of PPP mode,water conservancy investment and green finance.It then introduces such theories as related public goods,cooperative game theory,principal-agent theory,externality theory and market failure,Pigouvian tax and Coase Theorem.The content and development of relevant theories are discussed in detail and the mechanism of environmental effects of investment are analyzed.After that,the paper places emphasis on current situation of China's PPP mode of water conservancy investment,water environment and green finance.It reveals some problems and discusses the causes.The impact of PPP mode water investment on water environment is analyzed by panel data mode and fixed effects.Then,green financial indicators are introduced so that the role of green finance in regulating environmental impact of PPP mode water conservancy investment is studied to find out whether the water environment is further improved.Finally,the conclusion that the PPP mode water conservancy investment as a whole improves the level of the water environment is drawn.The increasing level is significant in eastern,central,and western regions while it is more pronounced in the eastern region.Green finance regulates the environmental effects of the PPP mode water conservancy investment.The role of integrated level of water environment has been enhanced by the addition of green finance,which has shown to be different inempirical analysis of eastern,central,and western regions.According to research results,this paper proposes recommendations for government departments,social capital,and financial institutions.It is hoped that government will further improve legal system to build a sound PPP investment tax preferential support policy,while at the same time further promoting interest rate marketization reform to optimize the PPP mode financial environment.For social capital,we must adhere to the contract spirit,make good project preparation and scientific evaluation.In the process of construction and evaluation,it is necessary to cooperate in various ways to improve the quality of project construction and operation,and to use environmental protection as an important idea for the implementation of project construction and operations.For financial institutions,it is necessary to actively promote and flexibly use the PPP mode in development of green finance to guide.We will support the advancement of PPP asset securitization,improve the exit mechanism of PPP investment,and promote the development of green financial products such as PPP green industry funds.