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Does environmental law enforcement supervision improve corporate carbon reduction performance? Evidence from environmental protection interview

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  • Pan, Junyu
  • Du, Lizhao
  • Wu, Haitao
  • Liu, Xiaoqian

Abstract

In response to the challenge of carbon emissions, countries worldwide have implemented a diverse range of environmental policies. However, the inefficient implementation of these policies remains a remarkable hurdle in the process of carbon governance. Exploiting the environmental protection interview (EPI) initiated in 2014 and 2015 as a quasi-natural experiment and utilizing firm-level data from 2011 to 2018, this study investigates whether the enhanced supervision of local environmental law enforcement by the central government causes changes in corporate carbon reduction performance (CCRP) based on the Staggered DID model. We observe that EPI notably improves CCRP, and this enhancement manifests both immediately and persistently over time. Furthermore, the impact of EPI on CCRP is more pronounced among large-scale enterprises, enterprises with low financing constraints, and those with weak political affiliations. Mechanism analysis indicates that government pollution control efforts, public environmental awareness, and enterprise source control are pivotal factors that strengthen the effectiveness of EPI. This study reveals the positive effects of EPI in achieving carbon reduction goals and underscores the vital role of institutionalized law enforcement supervision mechanisms as a fundamental prerequisite for policy efficacy.

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  • Pan, Junyu & Du, Lizhao & Wu, Haitao & Liu, Xiaoqian, 2024. "Does environmental law enforcement supervision improve corporate carbon reduction performance? Evidence from environmental protection interview," Energy Economics, Elsevier, vol. 132(C).
    • Handle: RePEc:eee:eneeco:v:132:y:2024:i:c:s014098832400149x
    DOI: 10.1016/j.eneco.2024.107441
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