Internalization of Environmental Cost

In the current environment concerned world economy, environmental costs became the pervasive topic affecting local, national and global economic developments. Through using the Cause-Effect Analysis, the author found out that a consequence from the externality of environmental costs is the market failure. Considering various environmental costs need to be differently measured, the author selects a case of CO₂ emission, which incontestably causes a kind of environmental costs. To internalize this kind of costs, CO₂ trading is most valuable being concerned, and it has been successfully applied in some of developed countries, especially in EU. For China, the author suggests an integrated method of CO₂ emission tax and CO₂ trading; the Clean Development Mechanism to balance the worldwide CO₂ credit trade; as well as the Green Manufacture to consolidate environmental costs during the production process. Those implementation approaches for internalizing the environmental cost incurred by CO₂ emission in China are recommended in this book. The author hopes this research could be shared with scholars who are interested in environmental cost related subjects.