Exploring Coordinative Mechanisms for Environmental Governance in Guangdong-Hong Kong-Macao Greater Bay Area: An Ecology of Games Framework

To solve regional environmental problems, there is a trend of establishing urban agglomerations and formulating cooperative policy institutions in China. The extant studies on policy institutions largely focus on the coordinative mechanisms of multiple actors within one single institution. Only a few studies have tried to understand how different policy institutions are interlinked and mutually affected to influence actors’ decisions and problem resolutions. This article applies a network-based analytical approach and adopts the Ecology of Games Framework to explore how regional environmental governance is coordinated in the Guangdong-Hong Kong-Macao Greater Bay Area. It was found that coordinative mechanisms in regional environmental governance can happen around three elements: policy institutions, policy actors, and policy issues. Policy institutions tend to serve as an umbrella for many diverse and interdependent activities and actors within individual institutions. Additionally, positive externalities emerging between different policy institutions perform as coordinators across institutions. For actors, state-level actors usually play as facilitators of policy institutions while they are not active in participating in policy games in later phases; it is regional actors, particularly from Guangdong, that are active in the operation of policy institutions. For policy issues, they emerge because they are often tied with each other, and some of them play as the common ground for seemly separating policy institutions.

The Strategic Use of Innovation to Influence Environmental Policy: Taxes versus Standards

This paper evaluates the strategic behavior of a polluting monopolist to influence environmental policy, either with taxes or with standards, comparing two alternative policy games. The first of the games assumes that the regulator commits to an ex-ante level of the policy instrument. The second one is the time-consistent policy game. We find that the strategic behavior of the firm is welfare improving and leads to more environmental innovation than under regulatory commitment if a tax is used to control pollution. However, the contrary occurs if an emission standard is used. Under commitment, it is shown that both policy instruments are equivalent. We conclude that the optimal environmental policy is to use an emission tax since it yields the same welfare level than an emission standard for a committed regulator yet a larger welfare for a non-committed regulator.