China’s Fiscal Policies to Solve Impact of Externalities and Environment

Abstract

Environmental pollution, resource waste, and ecological imbalance issues occur frequently in China, including air pollution, water pollution, waste disposal, land desertification and sand disasters, soil erosion, biodiversity destruction, and so on. This not only restricts our country's economic development, but also endangers the people's living standards and quality of life. Especially due to the properties of environmental resources, namely external properties, is more easily lead to market failure. Because the negative externalities of the environment have an impact on economic development and human existence, the government must improve its support for environmental protection. Although the effect of environmental protection has increased in recent years, and China's fiscal policy on environmental protection has improved, the strength of these policies is insufficient in terms of both fund investment and policy formulation. We must strengthen environmental preservation while boosting economic development. As a result, the government's and fiscal policy's unique role in environmental protection is critical.