Abstract:

Industrial effluent effective regulation is an important part of environmental protection. By analyzing plights of the participants in water environmental regulation in China, a water environment regulation system was constructed considering the central monitoring and public participation. Moreover, a water environment regulation contract, which has the effect of incentive and constraint penalty, was established, and a principalagent model was also developed, by which a set of optimal results of effluent standards, regulation probability, compensation amount and fines in the water environment regulation contract. Based on this system, two printing and dyeing enterprises in Tai Lake, which have considerably different cost types and water treatments, were taken as examples. A twostage contract has been designed for the two enterprises according to the results from the model, and the effects of public participation and local government protection probability on the contract are investigated. The results show that to enhance the public participation could decrease the optimal fine amount, which will weaken the contradictions between the local government and enterprise, and that by some system as environment accountability to decrease the local government protection probability will reduce the optimal regulatory frequency and make the supervision be low correspondingly