The views and control of environmental cost
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the company, corresponding driving force is lacked. First for the company, currently government has not requirement on company to carry out environment responsibility contract systems, therefore, as long as the
company can emit pollutants successfully, for government it is hard to call to account. Moreover, what is carried on governors is fixed-term appointment system, once the term of some governor is expired, pollution
responsibility formed within the term will be undertaken by the next government and next government finance, it is thus clear that no matter for the company or the governor, they both lack the driving force of being responsible
to monitor the future environment in this region.
1.3 Divide as per space scope of environmental cost
According to space scope of environmental cost, it can be divided into internal environmental cost and external environmental cost.
Internal environmental cost refers to the expense resulted by environmental factor and already made clear to be undertaken and paid by the company, for example, pollutant emission fees, environmental damage penalty,
environmental treatment and protection investment and increase of product environmental performance. One of the prominent features of internal environmental cost is that currency computation can be made, which will be
undertaken by the company. External environmental cost refers to those bad environmental results which are caused by company
economic activity but can not be clearly computed and still not be undertaken by the company for various reasons. For current Chinese law does not provide that the company has to undertake all the result of pollution caused
by the company, therefore, from company’s point of view, environmental cost is divided into external environmental cost and internal environmental cost.
Figure 2 Sketch of classification of environmental cost
Make up already occurred environmental loss
Environmental failure cost
Maintain currently environmental status
Internal environmental cost Environmental control cost
As per occurring functions of environmental cost
External environmental cost Prevent bad result that might
happen in future
As per space scope of environmental cost
Company’s environmental cost As per occurring time of
environmental cost
The views and control of environmental cost
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2. Government should be taken as the center to control environmental cost
Because of external feature of environmental cost, company lacks the driving force of controlling environmental cost. Therefore, this article suggests that government should be taken as the center to control
environmental cost and fully exert the function of government in macro management. Concretely speaking, government could plan environmental cost through industrial policy. Therefore, calculation and computation of
environmental cost become not important, what is important is control of regional environmental cost.
2.1 Environmental cost and its classification in regional economic development
Environmental cost in regional economic development refers to the expense occurred to prevent, control or treat impact economic development on environment by taking environmental responsible as the principle.
Because environmental cost possess the feature of publicity and lacks independency to some object. Generally speaking, control of environmental cost of certain specific object will be active, therefore, this article
thinks that, to control environmental cost in regional economic development, government should take a certain industry from the whole region as the object to be computed and control pollution of all companies of this
industry administered in this area to reduce occurrence of environmental cost.
Table 1 Classification of environmental cost in regional agricultural production processing industry
Item Classification
Object to bear environmental cost As per occurring time
Environmental control cost Borne by enterprise
Borne by local government Environmental failure cost
Borne by enterprise Borne by local government
As per occurring function Expenditure to make already occurred
environmental loss Borne by local government
Expenditure to maintain current environmental status
Borne by enterprise Borne by local government
Expenditure to prevent bad environmental result that might happen in future
Borne by enterprise Borne by local government
As per if belonging object can be made clear
Environmental cost that can be paid by the company
Borne by enterprise Environmental cost undertaken by the
government because the object it belongs to is not clear
Borne by local government
2.2 Stress taken by government on controlling over environment cost
Based cognition on regional company environmental cost and company environmental cost, this article thinks that government control over regional environmental cost should start from following several aspects:
2.2.1 Environmental control cost of a company should be lower than its environmental failure cost Government could make efforts from two aspects: one is to increase company’s environmental failure cost and
the other is to reduce company’s environmental control cost. 1 The way of increasing company’s environmental failure cost and judgment on its applicability
Increasing company’s failure cost shows as increasing standard of pollutants emission fees, strict monitor and high penalty on the company which emits pollutants illegally, high resource tax or environment tax on levied on
the use of resource and environment and increasing resource charge, etc.. These measures might influence introduction of local investment and might have bad impact on vigor of local economy and even cause temporary
recession of local economy, at least it will make government or investors worry about economic development. Before the economy of a country achieves certain developed degree, it is suggested to adopt this policy prudently.
2The way of reducing company’s environmental control cost and how to judge its applicability
