| Abstract: | Market-based approaches and command and control regulations are the two main tools that policy/decision makers use to implement environmental protection goals; however, these alone have proven to be somewhat ineffective or counterproductive in some cases. Therefore, this study proposes a hybrid environmental policy tool to guide river basin environmental management decisions. The river basin authority and regional Environmental Protection Agency (EPA), as the two leading decision makers, and policy makers and implementers of river basin management, make decisions sequentially in a process similar to a Stackelberg game. This decision making can be mathematically represented using a bi-level optimization model. The proposed model addressed the conflicting equitable resource allocation and economic efficiency objectives to achieve coordinated development of the whole river basin. To verify the model effectiveness, the most considerable pollutant emissions limits and water quality standards were set, and incentive measures (pollution chargers and subsidies) were applied to assess these hybrid instruments' impact on the decision outcomes. The results from a Minjiang river basin case further illustrated that the trade-off between social equity and cost-efficient environmental goals could efficiently achieve, proving that a combination of instruments could be influential in pollution decision-making and delivery of environmental policy. Given the model's proven effectiveness, several proposals are given for solving complex pollution problems that also need to consider the related socioeconomic issues. |
