The Effects of Economic Policy Instruments of Diffuse Water Pollution from Agriculture: A Comparative Analysis of China and the UK

The world is facing the challenge of increasing grain production and improving the environment, in which the treatment of diffuse water pollution from agriculture is the important content. Traditional administrative means are still unable to solve the problem of market failure and government failure in controlling water pollution. Economic policy instruments have more advantages in improving market economics and reducing the cost of environmental governance and supervision. They have become an important way to solve pollution and promote the transformation of water pollution prevention and control management. This paper puts forward suggestions and countermeasures for improving China’s economic policy instruments by systematically sorting out and analyzing the EPIs in China and the UK. Starting from the whole process of agricultural production, China’s water quality governance needs to follow three principles to innovate and comprehensively utilize economic policy instruments. A transparent multi-party information sharing and an efficient supervision system are invisible to water quality governance. China also needs to continue to deepen reforms and pilot projects, especially in terms of governance objectives, public welfare funds, water prices, tradable water rights, and emission rights. This paper could also provide a reference for water pollution control in other developing countries