Abstract

From the point of realistic background of my country's economic growth, while economic growth maintaining a high level, but the serious environmental pollution, ecological degradation, the condition of the high environmental cost and resource constraints of economic growth have not changed. The dilemma of economic growth and environmental pollution, how to achieve the harmonious development of the economic and environment by economic means have caused us to rethink. The problem of environment and mode of economic growth has become an important research topic. Under the background of this reality, the monograph chose the internalization of environmental costs and mode of economic growth transformation as the study subject. I try to theoretically explore the intrinsic mechanism between the internalization of environmental cost and economic growth mode transformation. At the same time, using the data of economic operation I analyze experimentally the internal relationship between environmental pollution and economic growth, industrial structure and structural pollution. On this basis I put forward the way of our country to speed up the economic growth mode transformation and market-oriented policy of environmental protection. This provides theoretical basis and the system mechanism for ecological civilization construction in the economic construction.

Firstly the monograph analyses the complexity of the interrelationships between the environmental systems and the economic systems using the systems approach and the entropy law. The lack environmental rationality for economic man and the interactions between the economic systems and the environmental system need an economic rational conduct with the unity of economic and environmental rationality. This produces the economic man of environmental rationality.

Secondly the monograph analyzes economic meaning and characteristics of the environmental costs. The environmental cost of the economic growth is economics of environmental service function and the cost of consumption on the environment assets in the process of economic activities. It has the characteristics of sociality and externalities. Then this monograph analyzes the environment cost structure and method of measurement, the environment cost is composed by the environmental resource depletion compensation costs and environmental impact maintenance cost and environmental protection to prevent expenditure. The monograph analyzes the meaning of the internalization of environment cost and the relationship of the internalization of environment cost and the coordinated development of economic and environment. This monograph thinks that the internalization of environment cost can reduce pollution emissions of enterprise and industry, prolong mining period of dry environment resources, prevent renewable environmental resources excessive development, promote the coordinated development of economy and environment.

In this monograph I has analyzed balanced growth paths which are ecological sustainable, in a two-sector growth model which incorporates environmental issues. I has derived the conditions under which balanced growth is both feasible and optimal. It appears that those conditions not only relate to production and substitution elasticity, but also to the regeneration function. A secular improvement in environmental quality increases the equilibrium growth rate. To bring the economy onto the sustained growth trajectory, we ought to build up environmental protection consciousness, improve green production technology and implement stricter environmental standard.

The Environmental Kuznets Curve（EKC）hypothesis proposes that there is an inverted U-shape relation between environmental degradation and income per capita. This monograph provides a possible theoretical explanation for the Environmental Kuznets Curve in the framework of en dogenous growth model. The EKC exists dynamically in the off-steady state. A change from insufficient to sufficient allocation of capital for abatement activity is the basis for an inverted U-shaped relationship between environmental quality and economic growth. This monograph uses panel data on Chinas' 30 provinces during 2004 ～2011 to examine the EKC relationship between per capita income and six categories measured pollution indicators. I find the volume of sulphur dioxide emission and emission of industrial dust has a U-shaped relationship with GDP per capita. But the discharge of industrial waste water assumes a N-shaped and volume of emission of industrial soot assumes an inverted N-shaped relationship with GDP per capita. COD decreases progressively and industrial solid wastes generated increases progressively with GDP per capita. Economic growth can not be endogenous to automatically solve environmental problems.

The economic growth pattern of low environmental costs is an ideal way of growth. For our country, relative to capital and environmental resources, labor is abundant. Labor intensive growth mode should be the optimal way of economic growth in our country. Generally labor-intensive industry is clean production industry. To change the pattern of economic growth We need firstly to transform the growth values of governments at all levels. The growth values of government should not be biased toward growth of economic value and should be the unity of the growth of economic value and ecological value. Second, we should implement resources environmental economic accounting. It provides basic data support to the coordinated development of economy and environment. The resource environmental accounting should be brought into the economic accounting and economic appraisal system of the government at all levels. Three is to develop and perfect the factor market, form a reasonable price system. On the one hand, developing resources property rights system suited to China's national conditions is the foundation of forming reasonable factor price system. On the other hand, through the effective environmental protection market the pollution related products price will all reflect the environmental cost and environmental loss. The internalization of environmental costs into the price of the product system makes the market mechanism in the product cost under the condition of normal operation. Four is the adjustment of industrial structure. Industrial policy should take environmental protection as the goal, based on the whole process of production management, coordinate the allocation efficiency of economic resources and the environment resources. We should expand the labor-intensive industries in industrial, especially in labor-intensive industry technology and knowledge intensive production, such as research and development, etc. We should vigorously develop modern service industry of low pollution, low energy consumption. The service industry will become the main engine driving the economic growth. Five is to promote the ecological environment compensation mechanism, compensation mode are:financial transfer payment, coordination between local government, environmental services market, ecological compensation fund and beneficiaries payment, etc.

Key words: The internalization of environment cost; Mode of economic growth; economic man of environmental rationality; Economic and environmental coordinated development; Endogenous Growth