Economic Growth, Environmental Protection and Government Intervention

Abstract

Around economic development, environmental protection and government intervention, a dynamic equilibrium model is constructed under the framework of neoclassical growth theory, which proves the harmonious thought of economic development and ecological environment. The conclusion is that economic development and ecological environment will eventually move towards harmony under the condition of capital intervention. Based on the consideration of control variables such as temperature, sunlight, pollution control investment, and population, the inter-provincial data in China has been used to verify the “inverted U” relationship between ecological environment and economic growth. The regression results prove the significance of this relationship, but the effects of investment, sunlight and temperature on the emissions of the provinces are not obvious. This paper has designed a systematic and cross-regional national ecological compensation system. Vertical ecological transfer payment revolves around giving the provinces the current general transfer payment ecological attributes. The main goal is to make up for the opportunity cost of ecological protection. Fairness is the core. Horizontal ecological transfer payment revolves around the idea of “who benefits and who pays”. The main goal is to make up for the direct input costs of ecological protection. Efficiency is the core. Ecological service beneficiary areas pay fees to ecological service providing areas.