Abstract: The causes of the envirunment pollutions in Taihu drainage area was analyzed using economics theory. The ol)jectives and encouragement policy were proposed to control the pollution, such as the dealing of pollutaut discharge permit regime. Economic suggestious, i. e. allocating the initial pollutant discharge permit regime, constructing lhe dealing mechanism, building up the harmonizing organization, and decreasing the quantity of regime slepwisely, ere, were also proposed in this paper.