Environmental cost and its classification in regional economic development

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