Section D Characteristics of Developing Conservation-oriented Economy in China
1 Levels of Ways of Developing Conservation-oriented Economy
The realization of COE relates to benefit transform among producers, consumers and the government. It's a huge complex long-term project. The author holds that, we should gradually develop COE promote the motivation of producers and consumers under the guidance of the government in an abstract-to-concrete way.
1.1 The First Level
Transformation of extensive growth, straight line production and wasteful spending is the key point of penetration to break the bottleneck of resource utilization and to develop COE. That is, the intensification of growth, recycling of the production paradigm and conservation of consuming methods form the first level of developing CEO.
Intensive growth, opposite to the extensive growth, is to reduce the input-output ratio, raise coefficient of utilization and increase value added portion by the same input by developing technology. It is to generate more output by less input so as to decrease resource consumption.
Recycle production paradigm is to change the former as “resource-product-waste” into “resource-product-renewable resource” through the“3R” principle. “Reduce” achieves production target and consumption target at lower cost of resources. “Reuse” means that products and packaging containers can be reused and repaired. As the cycle of use is extended, the resources for producing decrease. “Recycle” requires that products can be turned to be renewable resources after utilization instead of useless wastes. Different from straight line production, the recycle production paradigm reduces the upstream input and the waste emission.
Conservation-oriented consuming means to save resources in consuming activities. Resources are consumed in both production and consumption. CO consuming is to achieve the best effects by least consumption. In real life, people usually consume luxuriously due to their backward concepts. It leads to both mental and physical sub-health and waste of recourses.
1.2 The Second Level
We should develop intensive growth method, recycle production paradigm and CO consuming through highly motivating produces and costumers under the guidance of governments at all levels.
1.2.1 Rational Resource Pricing
The upstream inputs are mostly the preliminary processing natural resources such as water, power, coal, gasoline, mineral fuels and lands. The pricing of these products is not market-oriented in most countries. Besides, as they are closely relative to the nature whose value cannot be calculated, their price may rarely contain damage to the environment without the government's guidance, i.e., lack of environmental compensation. Market economy treats market-oriented system as its main method to configure resources. Only price which correctly reflects the relationship between supply and demand with an environmental compensation mechanism can really adjust and optimize the configuration. In terms of the operation regulation and leverage of price, we should be aware that the transformation of the growth of upstream products, production paradigm and consuming method is the invisible hand which controls the optimal configuration.
1.2.2 Resource Conservation of Industrial Structure
Different industrial structures need different resource consumption structures. From the angle of middle level, CO society needs a resource-conserving industrial structure, which entails two implications: one is the reduction of high energy consumption industries and increase of low energy consumption industries; the other is industries will pay more attention to product design, marketing and new product exploit, which takes the least energy. Change industrial structure is an important part of achieving the change of economic increase style.
1.2.3 Develop Industries on Recycling and Disposal of Waste
Industries on recycling and disposal of waste are the basis of circular economy. It is to recycle and process the wastes from daily life and manufacturing and turn them into renewable resources. So it is also called the vein industry. Vein industry cannot only reduce resource consumption, pollutant discharge, but also achieve appreciation. It is an energy saving and money making industry.
1.2.4 Comprehensive Utilization of Industrial Waste
Vein industry is designed for daily life waste, but comprehensive utilization of industrial waste refers to the use of waste heat, waste liquid, waste residue, etc. Discharge of these pollutants is a waste of resources and also a big threat to the natural environment. We can learn from Western countries' experience that utilization of industrial waste can effectively save resources and protect the environment, so further research should be conducted on its internal system, organizational form and situation, etc.
1.2.5 Raise Conservation-oriented Consumer Awareness
The participation of citizens is necessary in the establishment of CO consumption pattern. Because most consuming behaviors are conducted privately which cannot be supervised by the public, it is almost impossible for the government to limit CO consumption by law. Besides, not every CO consuming pattern is forcible; citizens have their own consumption rights. Therefore, the only way to develop CO consuming in the whole society is to raise citizens' CO consumer awareness.
1.2.6 Establish and Improve the Standard of Conservation-oriented Consumption Goods
The same kind of consumption goods has different resource consumption levels under different specifications, using time and condition. For example, different houses with different materials for walls have totally different thermal insulations. Thus, we should establish and improve the standard of CO consumption goods, limit the production of high resource consumption goods.
The above six aspects support the change of economic increase style and form the second level of developing COE.
1.3 The Third Level
Under the condition of market economy, profit maximization is the rule for COE, but it does not mean that the government could just look on without doing anything; rather, it should play its role in the establishment. The government should do its job as follows:
1.3.1 Enact Relevant Laws and Regulations
Enactment of conservation-oriented laws and regulations could promote resource saving in two ways: first, laws force industries to recycle wastes;second, laws demand manufacturers to adopt resource conservation-oriented style from the process of picking materials, designing products, packing, etc. Coase Theorem thinks that under the situation of clear property right, although there is transaction cost, we still can solve external problems through the market. The importance of laws is it not only stipulates people what to do, how to do, but also ensures the payment property right of dealing with waste. Such property right points our expected direction to resource recycling, which will foster a better friendship for human and nature.
1.3.2 Establish Conservation-oriented Society through the Economic Leverage
For resource conservation has highly positive externalities, the government should invest more funds on resource conservation techniques. Technique is very important for the establishment of CO society.
We should change enterprise payoff functions by fiscal policies, encourage the development of industries on recycling and disposal of waste, collect taxes of its negative externalities and allow its positive externalities, which can reduce producing cost and change payoff functions.
1.3.3 Establish Flexible Price Standard
The price difference of water, electricity and raw material from other products reflects on its characteristic of monopoly, which needs more price intervention of the government, and it takes more time. Upstream resources are taken from nature, it affects the environment, but the environment is not a product, so is difficult to ensure its value, and the product's final price.
However, under the condition of marketing system, price is the internal system to promote optimized distribution of resources; ① rising price can reduce resource consumption; ② implement flexible price system, achieve synchronization of resource marginal utility and marginal cost, ensure optimized distribution of resource; ③ collect expensive resource exploit compensation costs, and raise the price of downstream products, indirectly establish a compensation system. Recently, we can implement the ladder-style water charge system, over-plan, and excess water price markup charge mode; collect different levels of electric charge for high resource consumption industries; conduct further research on establishing coal-electricity tariff linkage mechanism.
1.3.4 Establish and Improve Resource Conservation Standards
The standard includes: ① develop standards of energy efficiency for domestic appliances and industrial products like draught fan, water pump, voltage transformer, electric motor, etc.; ② establish standards of energy efficiency for light commercial vehicle and building; ③ improve standards of water taking for key water-using industries; ④ develop and implement new land-use and evaluation standards.
1.3.5 Establish Supervision and Administration System
We should establish elimination system for equipments with high resource consumption and backward techniques; develop standards of access to market, forbid those products which cannot reach the standards to be sold in the market, to be imported, or be exported; forbid those high resource consumption building projects to build or sale; collect minerals with resource over proof; investigate and treat waste energy actions; establish circular economy evaluation system, and enforce and improve resource saving work.
2 The Particularity for China to Develop Conservation-oriented Economy
Highly efficient government plays an important part in the development of COE. The problems of the Chinese government on the aspect of institutional economics will be analyzed in this part.
2.1 Problems of the “Consignation-Agent” Mode in Public Management
2.1.1 Responsibility Defect of Government
We can learn from the public right's consignation-agent system that citizen play the role of client, the government and officials play the role of agent and execute pubic rights, but a citizen cannot control the government's specific action because of self-bounded rationality. At the same time, in their political life, official play the role of an economic man, and they will choose their actions depending on cost and profit. As a result, officials will choose self-benefit instead of citizens' benefit, which leads to the responsibility defect of the government. Obviously, the less the government gets away from citizens, the more wastes of “power resource” will be generated.
2.1.2 Low Executive Ability of Government
Comparing with the separation of proprietary right and management right in the company, there is the same phenomenon in the field of public policy, for example the constitutional right and executive right of policy. Except the incomplete policies, dissymmetry of information and benefit conflict also cause low executive ability, because execution organization knows better about the resource needs, execution effects and problems. With the help of this information, when the policies constituted by government cannot meet the benefit of the execution organization, they will execute it in a negative way, which will affect the completeness and evaluation of the policy and lead to low efficiency of the government.
2.2 The Problem of Transaction Cost
2.2.1 The problem of overstaffed government agencies
As social work is getting more and more complex, expanding government scale becomes a general trend, but getting bigger does not mean getting better, and it may result in a lot of negative effects, including corruption, social unrest and inefficiency. For China, this is not a new problem anymore, and we can see from the proportion of public servant that we had about 2.79 million public servants in 1979, 5.43 million in 1989, which increased 2.64 million; in 1995, the number reached 10.42 million, more than doubled from the previous 6 years. If we count the number of public institutions into it, we got 35.76 million in total, which means there is one official in every 30 people in China. The expansion of the government raises the management expense; staff increase causes complicated interpersonal relationship, even faction; besides, it affects information transfer, and these all reflect the problems of transaction cost.
2.2.2 Inappropriateness of government action
Economy is an important index to judge a country's comprehensive competence. Governments pay more and more attention to their economic functions. Economy growth cannot be achieved without governments' participation. Governments establish market economic order, build up economic infrastructure, conduct research on and provide market information, which reduces the transaction cost of market and push the development of economy. However, not all economic activities done by governments are good for economic development. For example, the misplacement and omission of governments will not only raise the cost, but also limit the economic growth.
Above all, the Chinese government has a lot of problems during its management process, so we should find out a solution to improve government efficiency and reduce public management cost.