Divide as per space scope of environmental cost

The views and control of environmental cost 31

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 The views and control of environmental cost 32 Another way to make company’s environmental control cost lower than its environmental failure cost is reducing company’s environmental control cost. There are following several concrete methods: z Consider cheap environmental protecting machines or the State provides subsidy to the company producing environmental protecting machines to make high polluting company’s investment on environmental protecting machine decreased; z Government could make high polluting company’s investment cost lower through providing subsidy to its investment on environmental protecting machine; z Government could carry out environmental cost audit on company and provide high subsidy to those active environment friendly companies. All these methods need government’s input support. 3 How should government make environmental control cost lower than environmental failure cost under low fiscal revenue? Based on above description, generally, only when the economy of a country or region develops to a certain degree and local fiscal revenue increases to certain degree, it could easily generate change of relationship between environmental control cost and environmental failure cost. But this is not to say government can not change the relationship between environmental control cost and environmental failure cost under low fiscal revenue. This article believes under insufficient fiscal revenue condition, government could more utilize industrial policy and achieve maximum reduction of environmental cost through adjusting industrial structure, industry upgrade, developing recycling economy and better use of industrial garden. 2.2.2 Produces done by the government The government should try to avoid that company makes environmental cost externalized because once it is externalized. It is hard for government to give this environmental responsibility clearly to the company. This externalized environmental cost in developed countries might only be paid by the country. While the treatment cost is very big, under low fiscal input, government should avoid externalization of environmental cost at the beginning of developing and planning industry. Concretely speaking, it could carry out environmental responsibility contract system with the company that is it could require company to contract corresponding resource. If the company does not carry out pollution control, because resource is polluted, company has to recover polluted resource. Generally, the cost to recover will be greatly higher than control cost, thus, it can pouch company to control environmental cost actively. References: Wang, Y. T. Zhao, Z. Y.. 2002. Environmental cost management: Beforehand planning regulation and its revelation to our country. Accounting Research, 1. In Chinese USEPA Green Dividends. 2000. The relationship between firms’ environmental performance and financial performance. In Chinese SONG, C. L.. 2009. Countermeasures on strengthening the environmental costs control of agricultural processing industry in Jilin province. China-USA Business Review, 6. In Chinese Edited by Mary and Linda