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This paper explores the relationship between green consumption and the environment from a new perspective of green consumption on the demand side. This paper further investigates how to design an environmental policy package to achieve optimal social allocation. The results show that: first, green consumption can still improve the environment without supply-driven policy; second, demand-driven environmental change is better than supply-driven change in improving the environment and increasing social welfare; and third, a policy package which includes green consumption is more efficient.

Evaluation of Optimal Policy on Environmental Change through Green Consumption