Incentive mechanism for allocating total permitted pollution discharge capacity and evaluating the validity of free allocation

In this paper, the validity evaluation method of free allocation is studied under the background of allocating the total permitted pollution discharge capacity (TPPDC). First, the free allocation method’s localization and players’ strategic behaviors are analyzed. Second, an incentive mechanism for allocating TPPDC is proposed based on the uniform price auction of divisible goods, and an evaluation model to evaluate the validity for the free allocation of TPPDC is established, and the feasibility and reasonableness of this evaluation model are proved. Third, the evaluation criterion and the evaluation process are given. Finally, this evaluation model is applied to the environmental planning of Han River basin, and the validity evaluation result of free allocation is obtained by analyzing the statistical data of chemical oxygen demand (COD) in 14 counties and cities of Hubei Province, China. The results of our study will provide the government environmental management departments with theoretical basis and scientific methods to effectively implement the pollutant gross control system and design the related environmental policies.