Abstract

Industrial relocation and ecological subsidy are viewed as effective ways to overcome transboundary industrial pollution. In this paper, we study the transboundary industrial pollution control problem in the Beijing-Tianjin-Hebei region in the context of industrial relocation. Firstly, we construct an economic model of pollution control with relevant variables such as environmental tax and environmental damage coefficient. Secondly, we solve the economic contributions by using the proportional split-off solution. Finally, we compare the optimal relocation quantity and welfare functions in both cooperative and non-cooperative cases. Our research finds that: 1) The optimal strategy is closely related to utility coefficient, environmental loss coefficient and incentive intensity coefficient. 2) The welfare function and the optimal relocation quantity in the cooperative case are significantly greater than those in the non-cooperative case. Based on the analysis, some suggestions are provided for transboundary industrial pollution management.