Research on incentive strategies and cost-sharing mechanisms for cross-regional pollution control

Abstract

Regional environmental collaborative governance is an effective way of addressing increasingly complex and severe environmental pollution. This study constructs a differential game model for regional collaborative governance consisting of the central government and two heterogeneous local governments. From a dynamic game perspective, we compare and analyze the game equilibrium solutions of each participant under five scenarios: noncooperation, vertical compensation, horizontal compensation, comprehensive compensation, and collaborative governance. In addition, this study constructs a dynamically consistent cost-sharing scheme that considers each participant’s fairness concerns. The results indicate that compared to non-cooperative situations, vertical, horizontal, and comprehensive ecological compensation mechanisms achieve a reduction in pollution emission levels and costs as well as an increase in emission reduction efforts in underdeveloped areas. Second, the effect of comprehensive ecological compensation is better than that of horizontal compensation, which is superior to the effect of vertical compensation. Third, compared to ecological compensation mechanisms, the collaborative governance model is more effective in pollution control, not only in improving central government intervention and the pollution reduction level of local governments, but also in reducing governance costs. Finally, the bargaining power and degree of fairness concern for each player can affect the cost-sharing ratio. Additionally, underdeveloped regions tend to form alliances with developed regions and negotiate with the central government to reduce pollution control costs. The research conclusions can provide a theoretical reference for improving ecological compensation mechanisms and strengthening the long-term mechanisms of regional collaborative governance.