The impact of insurance on pollution emissions: Evidence from China's environmental pollution liability insurance

Beibei Shi, Lisha Jiang, Rui Bao, Ziqing Zhang and YuanQi Kang

Economic Modelling, 2023, vol. 121, issue C

Abstract: The disaster risks caused by environmental pollution can be effectively reduced by insurance, however, how insurance affects pollution emissions remains unexplored in existing literature. This study aims to investigate the impacts of Environmental Pollution Liability Insurance (EPLI) implemented in China on pollution emissions by adopting difference-in-differences approach. Using the data at the prefecture-city level from 2003 to 2015, we find that EPLI has a significant inhibitory effect on pollution emissions, and the effect is stronger with the increasing numbers of insured enterprises and insurance premiums. Further analysis exploring channels suggests that EPLI can strengthen public supervision by compensating the public for economic losses caused by pollution, and improve self-discipline by increasing economic punishment for enterprises pollution. Our findings provide a new rationale for environmental administrators to regulate industrial polluters.

Keywords: Environmental pollution liability insurance; Industrial pollution; Environmental regulation; Quasi-natural experiment (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S026499932300041X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:121:y:2023:i:c:s026499932300041x

DOI: 10.1016/j.econmod.2023.106229

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().