We present and estimate a dynamic stochastic general equilibrium model for an eco-environmental damage compensation system (EDCS) with multi-stakeholder engagements. Then we explore the dynamic effect under different shocks such as household and government supervision, environmental damage compensation ratio, pollution emission threshold, and pollution control efforts. The household and government supervision show the positive effect of environmental regulation on conserving energy, abating emission, reducing damage compensation, and increasing economic output. The environmental damage compensation ratio can also contribute to energy conservation and emission reduction, but there are no significant regulation effects of pollutant emission and damage compensation. The pollutant emission threshold and the pollution control efforts have significant environmental regulation effects, but the latter does not significantly restrain high energy consumption. All the shocks mentioned above can effectively improve the green development level.
