Economics Analysis on "Market Failure" of Ecological and Public Benefit Forest and Correcting Policies

Externalities of ecological and public benefit forest,the mixed policy of governance subsidy and decreasing tax are briefly discussed in the paper from the view point of economic-man,then draw a conclusion that both governance subsidy and the mixed policy can internalize the externalities,and correct "market failure",at the same time,put forward five suggestions-Financing for value compensation of public benefit forest,making reasonable compensation norm,giving manager exclusive right of production,decreasing tax and employing market to correct "market failure".