Environmental problem and government policies

The Trump administration is almost definitely environmentally unfriendly, as the budget plan issues massive cuts in environmentally friendly sectors and the Trump administration also issues environmental deregulations and encourages traditional energy industries. China has been passionate about environmentally friendly development. The Chinese solar industry has received significant amounts of funding from the central government and the local governments, and because of the support received from the Chinese government, the Chinese solar industry has been enjoying a period of fast development. Some solar companies in other countries other than China have been downgraded by many financial institutions as these financial institutions are afraid of oversupply due to the development of the Chinese solar sector and they are also unconfident about the American solar sector development due to the current US administration.

Environmentally friendly policies usually have several main goals. Firstly, China especially is passionate about solving its current air pollution problem. Therefore, such policy often targets improving environment. It has other positive side effects, for example, it could improve the population health and the happiness of the population as well. Secondly, it can boost investment and manage the domestic investment. China sees the alternative energy as the future energy, investment in this sector could generate an outcome with more social benefits and greater returns. Therefore, China uses these policies to make investment and government spending more effective and efficient. Of course, other governments could issue other kinds of policies to make their domestic investment more effective in other ways they want to be. Thirdly, policies sometimes could correct market failures without directly taxing or subsidising. This could save government spendings to some extent. Fourthly, it also sends the market and the society a signal of what the government want. It could provide some guidance to the economy and this could make the process smoother and once there is some problem, it could be solved without causing too much damage.