The Protected Polluters: Empirical Evidence from the National Environmental Information Disclosure Program in China

Abstract

Abstract As a bottom-up approach, the effectiveness of the environmental information transparency policy hinges on a broad societal ecosystem, including elements such as the active mass media and the robust civil society. However, due to the lack of public participation and accountability mechanisms, it is still doubtful whether the Chinese environmental transparency program promoted corporate pollution mitigation efforts. In this study, we investigated the impacts of the Environmental Information Disclosure (EID) program, an important Chinese environmental transparency program, on corporate mitigation investments, by using the 2012 Chinese Private Enterprise Survey. Our Tobit-IV model provides robust evidence that transparency policy exerts significant influences only on non-politically connected polluters, while, by contrast, politically connected firms are less susceptible to the EID program. We suggest that the community should be empowered to deter the shelter effects of local governors to the connected firms, which deteriorate the effectiveness of the transparency program.