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From liability to opportunity

How environmental protection taxes can propel water pollution mitigation in heavy polluting enterprises

Bibliographic Data

ID21600543
AuthorsLan Mu (0000-0003-0199-9509, Shaanxi Normal University, corresponding author), Qiongyao Wang (0000-0002-6760-4234, Shaanxi Normal University), Ying Li (0000-0003-0678-9535, Shaanxi Normal University), Haoying Liu (Shaanxi Normal University), Chuanzhen Zhang (0009-0005-7398-4447, Shaanxi Normal University)
Year2025
Pages1-32
Publication date2025-11-24
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueJournal of Environmental Planning and Management (JOURNAL)
Journal identifiersISSN: 0964-0568 • E-ISSN: 1360-0559
PublisherInforma UK Limited (PUBLISHER • GB)
DOI10.1080/09640568.2025.2588380
OpenAlexW4416575489
LanguageEN
References cited87

This study examines how the Environmental Protection Tax (EPT) influences water pollution control among major polluting firms in China. Using a triple difference (DDD) approach on A-share firm data from 2009–2022, we find that the EPT significantly reduces firms’ pollutant discharges, with the strongest effect appearing in the second year after implementation. We develop an institutionally grounded framework that connects managerial responses and political incentives, revealing two main channels – improved corporate management and strengthened political promotion incentives. The effects are concentrated in non–state-owned, large, and competitive firms with lower ownership–control separation. This study contributes by developing a dual-mechanism framework that links political incentives and corporate governance, revealing how fiscal environmental instruments shape firm behavior and sustain policy effectiveness under state capitalism, thereby advancing environmental taxation research from efficiency evaluation to institutional mechanisms

Clean Water Act · Climate change mitigation · Liability · Pollution prevention · Water industry · Water pollution · Climate Change Policy and Economics · International Environmental Law and Policies · Regulation and Compliance Studies · Pollution

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