The Mechanism of Environmental Protection Industry Stimulated by Financial Incentive Policy

Abstract

The financial incentive mechanism of China's environmental protection industry (EPI) is not complete at the present stage, It is of great significance for the development of EPI to study the action path and way of financial means. This paper analyzed the promoting effect of financial incentive to EPI, regarding the environmental protection market (EPM) as the carrier of EPI and adopting the method of system dynamics. The Supply and market concentration degree (MCD) are employed as characterization variables to study the effect of financial incentive under different preferential intensity. The research conclusion shows as following: The impact of financial incentive on the development of EPI is mainly embodied in capital investment; financial incentive has an obvious promotion on both Supply and MCD; the effect on Supply and MCD presents constant and decreasing scale effect severally.