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Does Privatization Improve the Environment

Author: LiuCong
Tutor: LiuZuo
School: Xiamen University
Course: Finance
Keywords: mixed duopoly privatization environmental taxes
CLC: X196
Type: Master's thesis
Year: 2014
Downloads: 3
Quote: 0
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With the rapid development of the economy and the improving of the comprehensive national strength, China has grown into the world’s second largest economy. But attaching too much importance to economic growth rate and the "pollution first, treatment later" environmental philosophy makes our environmental problems intensified, resource depletion, soil erosion, The Divine Land haze raging, environmental issues have become an important factor that limiting sustainable development of China’s economy. Facing to the Environmental problems, the Western countries generally adopted environmental tax policy tools to deal with this and achieved good results. Learn from the experience of Western countries to levy environmental taxes, our environment tax reform also need to expand.Compared with the perfect market economic system in OECD countries, China’s major polluting industries are not in the fully competitive market, and the market is jointly composed of state-owned enterprises and private companies. Accompanied by in-depth reform of state-owned enterprises, state ebb and private flow has become one of the direction of SOE reform, but on the occasion of environmental tax policy is going to announce, Academia is lack of discussion on how privatization of state-owned enterprises affects the environment tax effect.on the basis of research from Chinese and foreign scholars, in order to fully explore how the privatization affects the effects of environmental taxes under mixed oligopoly market, this paper distinguish mixed oligopoly market for heterogeneous and homogeneous product market. Using the method of Comparative analysis of the microscopic model, this paper explores how the privatization affect the effects of environmental taxes under mixed oligopoly market, concluded:under optimal environmental tax context, after privatization, the government faces a tradeoff between the overall social welfare and environmental protection, the privatization of state-owned enterprises could good to economy but may weaken environmental bonus of environmental taxes; when environmental taxes keep unchanged after privatization, though at the expense of sacrificing of the Social Welfare but the environment has been improved.The clue of this paper are as follows:First, introduced the environmental conditions in china as well as the market structure of polluting industries and the reform of state-owned enterprises; followed by the study of the basic theory of the environmental taxes and conducted a literature review of research on environmental tax on home and abroad; then using Game theory models detailed analyzed how the privatization affect the effects of environmental taxes under mixed oligopoly market; Finally, analyzed the status quo and defects of China’s environmental taxes and on this basis to put forward some policy suggestions of environmental tax reform under our mixed duopoly market.

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CLC: > Environmental science, safety science > The basic theory for the Environment and Science > Environmental Economics
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