Effects of environmental liability insurance on illegal pollutant discharge of heavy polluting enterprises: Emission reduction incentives or pollution protector?

Abstract

This paper discusses the impact of environmental liability insurance (ELI) on illegal pollution discharge (ILD). ILD was measured by the diurnal pollution coefficient of variation at the monitoring station nearest to the heavily polluting enterprise. Results show that: (1) Compared with firms that do not participate in ELI, ELI can inhibit ILD by 0.24 %. (2) Impact paths mainly include pollution prevention, production, emission and supervision effects. On the one hand, ELI can aggravate ILD by weakening environmental responsibility and increasing management costs, on the other hand, ELI can also curb ILD by increasing environmental protection investment and government punishment. (3) ELI is more able to suppress ILD of state-owned enterprises and large-scale firms, while ELD aggravates ILD of labor-intensive firms. (4) Peer effect of ELI in the same region is more obvious. This paper aims to provide insurance implications for restraining ILD.