The Impact of Environmental Regulations on Enterprise Pollution Emission from the Perspective of “Overseeing the Government”

Abstract

This study aims to analyze the impact of “overseeing the government” on corporate pollution control and emission reduction behavior and the choice of corporate emission reduction paths. The central government in China persistently reinforces its environmental oversight of local governments. The effectiveness of environmental protection is closely tied to the performance of local officials and the implementation of the “one vote veto” system in the realm of environmental conservation. In this study, we use the evolutionary game model theory and the DID model to test the impact of “overseeing the government” on the environmental behavior of enterprises. Specifically, this study establishes an evolutionary game model between local government and enterprises, exploring how the local government and the enterprise make decisions. The theoretical findings are validated using pollution data from industrial enterprises in China. The study reveals that enterprises are influenced by local governments primarily when the costs of environmental abatement are relatively low, and the costs of noncompliance are high. Strengthening government oversight leads to a reduction in the intensity and overall emissions of both water and air pollutants. Enterprises respond by increasing their utilization of clean energy sources, reducing their reliance on fossil fuels, and enhancing their pollution control infrastructure to mitigate emissions. Notably, there is no evidence suggesting that enterprises curtail production levels to reduce emissions. Therefore, it is crucial to develop a rational understanding of the relationship between environmental protection and economic performance. In addition, tailored policies should be formulated to enable precise pollution control measures and facilitate the pursuit of high-quality development.