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

Round 1

Reviewer 1 Report

I see the paper entitled: 

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

as below:

An interesting point from finance and management expertise that pinpointing to the very existence of environmental pollution issues in trying to solve the pollution activities.

How you do relate to water-energy-food Nexus from the findings of your study?

The mathematical calculations are very complicated to me since I am just an ecotoxicologist. However, the mathematical calculations embedding with the Big Data, AI approach, modelling to predict the future occurences of pollutions in connection to policies, will make this findings so novel globally.

I think that governmental policies do decide the overall outcome of what we can achieve regardless of how good our studies or findings or models proposed, can you give your opinions or recommendations for future policy-makers in handling the global pollution that results in climate change?

 Can you discuss how your findings would benefit the 17 UNSGDs?

Thank you

Author Response

Point 1: How you do relate to water-energy-food Nexus from the findings of your study?

Response 1: From the findings of our study, we find that the government's environmental supervision has been strengthened, and enterprises will take various measures to reduce pollution emissions. For example, increasing the use of clean energy and adding pollution treatment facilities. Food production requires clean water, and the use of clean energy reduces water pollution. Therefore, the government's strengthening of environmental supervision not only reduces water pollution but also facilitates food production and promotes sustainable social development. In addition, reducing water pollution is also good for energy. We know that water pollutants can clog corroded water pumps and pipes and cause power plant cooling systems to fail, thereby reducing power generation efficiency. Energy is vital to food production, and any shortage of energy can paralyze food production. The above is my understanding of the water-energy-food relationship.

Point 2: I think that governmental policies do decide the overall outcome of what we can achieve regardless of how good our studies or findings or models proposed, can you give your opinions or recommendations for future policy-makers in handling the global pollution that results in climate change? 

Response 2: We strongly agree with the reviewers, so we re-propose a new policy proposal as a modest contribution to global pollution control. For the convenience of reviewers, the excerpts are as follows:

First, the central government should maintain appropriate supervision and link local government performance appraisals with environmental protection. This suggestion applies not only to the Chinese government but also to other countries around the world. According to the national conditions of each country, countries with different systems have formulated corresponding supervision mechanisms to supervise the implementation of local government policies and reduce collusion between government and enterprises.

Second, further reducing the cost of clean energy will help reduce pollution emissions at the source. At present, the price of clean energy is generally higher than that of traditional fossil energy around the world. In order to make enterprises more willing to choose clean energy, the first step is to reduce the price of clean energy. On the one hand, by encouraging technological progress and increasing investment in new energy, we can fundamentally lower the price of clean energy. On the other hand, increase the price of traditional energy by imposing a carbon tax and other means.

Third, local governments should improve the centralised treatment capacity of wastewater, urge enterprises to install pollution treatment equipment, and reduce emissions of waste gas pollutants. For water pollution, the establishment of wastewater treatment plants is very important, but the investment in wastewater treatment plants is relatively high, and some small and medium-sized enterprises are unable to build wastewater treatment plants. Therefore, it is necessary for cities to build sewage treatment plants to deal with water pollution problems and reduce the phenomenon of companies smuggling and leaking sewage due to insufficient governance capabilities. As for air pollution, installing dust removal, desulfurization, and other equipment on the chimney of the factory can reduce the pollutants discharged into the air, and most enterprises can afford the installation cost. This advice applies not only to Chinese companies but also to other companies around the world.

Point 3: Can you discuss how your findings would benefit the 17 UNSGDs?

Response 3: Our findings that enhanced environmental regulation can help reduce water and air pollution emission intensities and total emissions will contribute to clean drinking water goals and sustainable cities and communities goals. At the same time, strengthening environmental supervision will also promote the green transformation of enterprises and encourage enterprises to optimize production scale and production processes. Under increasingly stringent supervision, capable enterprises will also increase investment in environmental protection and carry out green innovation. Then optimize the industrial structure of the whole society, improve the allocation efficiency, reduce the waste of resources, and promote the sustainable development of the whole society.

Reviewer 2 Report

The article lacks a clear and coherent structure. The information presented is repetitive and redundant, making it difficult for readers to follow the main arguments and key points. The authors should revise the article to ensure a logical flow of ideas and eliminate unnecessary repetitions.

 

The article heavily relies on references without providing sufficient critical analysis or synthesis of the existing research. The authors should aim to provide a more comprehensive understanding of the topic by critically evaluating the strengths and weaknesses of the cited studies. This would demonstrate a deeper engagement with the literature and enhance the article's credibility.

 

The use of technical terminology and complex language throughout the article makes it inaccessible to a broader audience. The authors should strive for clarity and simplicity in their writing, ensuring that the content can be easily understood by readers without specialized knowledge in the field.

 

The article lacks a well-defined research question or hypothesis that would guide the discussion and provide a clear focus. Without a clear research question, the article feels disjointed and lacks a cohesive argument. The authors should articulate a specific research question and use it as a framework for organizing their arguments and findings.

 

The limitations of the study are not adequately addressed in the article. It is crucial for the authors to acknowledge and discuss the limitations of their research methodology, data sources, and analytical approach. By providing a transparent assessment of the study's limitations, readers can better understand the scope and reliability of the findings.

 

The article would benefit from a more robust discussion of alternative perspectives or counterarguments. Presenting differing viewpoints and addressing potential criticisms would strengthen the overall argument and demonstrate a more nuanced understanding of the topic.

 

The implications and recommendations provided in the article lack specificity and practicality. The authors should provide concrete suggestions for policymakers and stakeholders based on the findings of the study. These recommendations should be actionable and provide clear guidance on how to address the environmental challenges discussed.

 

The conclusion of the article feels abrupt and does not effectively summarize the key findings and implications. The authors should revise the conclusion to provide a concise and comprehensive summary of the main points discussed throughout the article. Additionally, the conclusion should highlight the broader implications of the research and suggest avenues for future research.

By addressing these critical points, the authors can significantly improve the article's clarity, coherence, and depth of analysis. This would enhance its contribution to the field of environmental conservation and make it more engaging and valuable for readers.

Author Response

Point 1: The article lacks a clear and coherent structure. The information presented is repetitive and redundant, making it difficult for readers to follow the main arguments and key points. The authors should revise the article to ensure a logical flow of ideas and eliminate unnecessary repetitions.

Response 1: We strongly agree with the reviewer's comments. According to the comments of the reviewers, we reorganized the structure of the article, in which the first part is the introduction, the second part is the literature review,the third section is the theoretical framework, the fourth section is data and methodology, the fifth section is the results and discussion, and the sixth section presents the conclusions and suggestions. Making the logic of the article smoother. In addition, we reorganized the content of the article to reduce the duplication and redundancy of information by means of deletion, merging, and refining.Especially in the theoretical analysis part, most of the redundant information has been deleted. Here is a sample before and after modification:

Before fixing: If companies use more clean energy and less traditional fossil energy, the cost of cutting emissions is likely to increase. At this moment, the strategic choice of businesses depends on how much local governments help businesses that reduce emissions and how much they charge for too many emissions. When the local government has many subsidies for companies that reduce emissions and large fines for companies that emit too much, whether companies choose clean energy will depend on what the local government decides to do strategically. In the context of "overseeing the government" and environmental regulation, it is more likely that local governments will make regulations mandatory. In this case, the local government will increase environmental protection subsidies, on the one hand, and increase penalties, on the other hand. By using more clean energy, companies have a good chance of stopping pollution at its source.

After fixing: If enterprises use more clean energy and less traditional fossil energy, the cost of emission reduction will increase. At this moment, the choice of enterprises depends on the local government’s subsidy and the charge for emissions. When the amount of subsidy and fines is large, the choice of enterprises depends on the local government. In the context of "overseeing the government", local governments are more likely to implement mandatory regulations. In this case, the local government will increase environmental subsidies on the one hand and increase penalties on the other. This will encourage companies to use clean energy to reduce pollution emissions.

Point 2: The article heavily relies on references without providing sufficient critical analysis or synthesis of the existing research. The authors should aim to provide a more comprehensive understanding of the topic by critically evaluating the strengths and weaknesses of the cited studies. This would demonstrate a deeper engagement with the literature and enhance the article's credibility.

Response 2: We strongly agree with the reviewer's comments, and following this suggestion, we dug deeply into the existing literature and provided a critical summary of the literature. In this process, we gain a deeper and more comprehensive understanding of the topic of the article. Please refer to pages 2-4 for details.

Point 3: The use of technical terminology and complex language throughout the article makes it inaccessible to a broader audience. The authors should strive for clarity and simplicity in their writing, ensuring that the content can be easily understood by readers without specialized knowledge in the field. 

Response 3: We strongly agree with the reviewer's opinion and have revised the language expression of the full text, especially the theoretical analysis part. Strive to make the article more clear, concise and easy to read.

Point 4: The article lacks a well-defined research question or hypothesis that would guide the discussion and provide a clear focus. Without a clear research question, the article feels disjointed and lacks a cohesive argument. The authors should articulate a specific research question and use it as a framework for organizing their arguments and findings.

Response 4: According to the comment of the reviewer, we highlighted the research questions and reiterated the main research questions in the abstract, introduction, and other parts, making it easier for readers to understand the main research questions of the article.

Point 5: The limitations of the study are not adequately addressed in the article. It is crucial for the authors to acknowledge and discuss the limitations of their research methodology, data sources, and analytical approach. By providing a transparent assessment of the study's limitations, readers can better understand the scope and reliability of the findings.

Response 5: We strongly agree with the reviewers and again discuss the shortcomings and limitations of the article in depth in the concluding section. The specific contents are as follows:

Of course, there are still some limitations in the study because we focus on the micro-enterprise and study the behaviour of industrial enterprises. Therefore, this study uses data on Chinese industrial enterprises and cannot test how policies such as environmental protection interviews and central environmental protection inspections affect micro-enterprises. However, the research results are still useful as a point of reference, especially for the analysis of microscopic large sample data, which can show the full effect of how a policy is implemented. Although data on listed companies is regularly updated, it does not include all enterprises of a certain scale and above. As work to protect the environment moves forward, it is becoming increasingly difficult to ignore how small and medium-sized enterprises release pollution. This is one of the main reasons why industrial enterprise data was chosen for this study. In addition, this study examines the effect of "overseeing the government". This policy is closely related to China's system and has little relevance for countries with different systems. However, the test of the policy effect also proves the significance of third-party supervision, revealing that no matter what kind of national system, local governments need strong supervision in the process of implementing environmental protection policies.

Point 6: The article would benefit from a more robust discussion of alternative perspectives or counterarguments. Presenting differing viewpoints and addressing potential criticisms would strengthen the overall argument and demonstrate a more nuanced understanding of the topic.

Response 6: In response to the comment, the article summarizes the views of existing relevant scholars in the literature review section and discusses the relevant views. The differences and marginal contributions of this paper from other studies are highlighted. The specific contents are as follows:

Compared to previous studies, this study makes the following marginal contributions. First, it builds an evolutionary game model between a local government and an enterprise to examine the strategic choices made by enterprises and governments. Theoretical analysis of corporate environmental behaviour choices and possible emission reduction paths. Second, from the perspectives of source prevention and end control, we examine the path of corporate emission reduction and add to the research that has already been conducted. Third, starting from the emission reduction data of micro-enterprises, it provides evidence for the emission reduction of micro-enterprises in China for existing research. 

Point 7: The implications and recommendations provided in the article lack specificity and practicality. The authors should provide concrete suggestions for policymakers and stakeholders based on the findings of the study. These recommendations should be actionable and provide clear guidance on how to address the environmental challenges discussed.

Response 7: We strongly agree with the reviewers' comments, and based on the comments, we reorganized the targeted policy recommendations. The specific changes are as follows:

Based on the above research findings, we emphasize the following aspects to fully leverage the initiative of enterprises in pollution control and emission reduction:

First, the central government should maintain appropriate supervision and link local government performance appraisals with environmental protection. This suggestion applies not only to the Chinese government but also to other countries around the world. According to the national conditions of each country, countries with different systems have formulated corresponding supervision mechanisms to supervise the implementation of local government policies and reduce collusion between government and enterprises.

Second, further reducing the cost of clean energy will help reduce pollution emissions at the source. At present, the price of clean energy is generally higher than that of traditional fossil energy around the world. In order to make enterprises more willing to choose clean energy, the first step is to reduce the price of clean energy. On the one hand, by encouraging technological progress and increasing investment in new energy, we can fundamentally lower the price of clean energy. On the other hand, increase the price of traditional energy by imposing a carbon tax and other means.

Third, local governments should improve the centralized treatment capacity of wastewater, urge enterprises to install pollution treatment equipment, and reduce emissions of waste gas pollutants. For water pollution, the establishment of wastewater treatment plants is very important, but the investment in wastewater treatment plants is relatively high, and some small and medium-sized enterprises are unable to build wastewater treatment plants. Therefore, it is necessary for cities to build sewage treatment plants to deal with water pollution problems and reduce the phenomenon of companies smuggling and leaking sewage due to insufficient governance capabilities. As for air pollution, installing dust removal, desulfurization, and other equipment on the chimney of the factory can reduce the pollutants discharged into the air, and most enterprises can afford the installation cost. This advice applies not only to Chinese companies but also to other companies around the world.

Point 8: The conclusion of the article feels abrupt and does not effectively summarize the key findings and implications. The authors should revise the conclusion to provide a concise and comprehensive summary of the main points discussed throughout the article. Additionally, the conclusion should highlight the broader implications of the research and suggest avenues for future research. 

Response 8: We strongly agree with the reviewers' comments, and based on the comments, we reorganized the conclusions of the article and put forward more targeted policy recommendations. The specific changes are as follows:

This study analyzes the choice of enterprises against the background of "overseeing the government" by establishing a two-sector evolutionary game model of local government and enterprises. And using the microscopic data of Chinese industrial enterprises from 2001 to 2010, the DID method is used to empirically study the impact of "overseeing the government" on the discharge of water and air pollutants from Chinese enterprises. At the same time, further explore the path of corporate emission reduction. The study found that "overseeing the government" significantly reduced the intensity of chemical oxygen demand and sulfur dioxide emissions and achieved total emission reductions. In terms of source prevention and control, enterprises mainly reduce pollution emissions by increasing the use of clean energy and reducing the use of traditional energy. In terms of terminal treatment, enterprises mainly reduce emissions by increasing pollution control equipment. At the same time, there is no evidence of enterprises reducing emissions through production reduction. It can be seen that, from the perspective of production, environmental governance has less impact on enterprise output. Therefore, environmental protection and economic development are not in an either-or relationship. Properly handling the relationship between environmental protection and economic development is of great significance not only to China's sustainable development but also to the cause of sustainable development in the world, so as to realize the 17 sustainable development goals proposed by the United Nations as soon as possible.

Author Response File: Author Response.docx

Reviewer 3 Report

The article deals with investigation of the impact of environmental management on enterprise pollution emission. The research topic is rather interesting and important taking into account relevant ecological priorities.

Comments and recommendations:

There are no goals and methods of the research in Abstract. They should be added in order to clarify information about the research for readers.

The introduction might be supplemented by deeper literature review of the research topic.

The structure of the manuscript doesn’t match the typical structure: no literature review, general methodology, discussion.

The hypotheses are rather abstract. It doesn’t meet complex calculations going further.

The contribution of the results achieved and their practical significance are not clear.

 Minor editing of English language required

Author Response

Point 1: There are no goals and methods of the research in Abstract. They should be added in order to clarify information about the research for readers. 

Response 1: We strongly agree with the reviewer's comments, according to which we clearly stated the research objectives and methods in the Abstract. The details are as follows:

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 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.

Point 2: The introduction might be supplemented by deeper literature review of the research topic. 

Response 2: We strongly agree with the reviewer's comments. The original text of the article is too weak. We have added literature and summarized this literature to gain a deeper understanding of existing research. The details are as follows:

2. Review of the Literature

Many studies have been conducted on how to reduce corporate emissions by "overseeing the enterprise." For example, they look at how policies such as pollution discharge fees, pollution discharge taxes, environmental administrative penalties, environmental information disclosure, and tradeable carbon emission permits affect environmental governance. Most research on sewage charges and taxes is from a macro perspective, finding that the collection of sewage charges and taxes significantly promotes corporate pollution control and emission reduction. Bongaerts and Kraemer's (1989) study is a good example [1]. It looks at how the collection of sewage fees and taxes in some European countries stops water pollution. Laplante and Rilstone (1996) examined the impact of pollution inspections on the emission levels of Quebec's pulp and paper industry and found that inspections are beneficial to pollution reduction [2]. Becker and Henderson (2000) used US business data from 1963 to 1992 and found that air quality regulation suppressed emissions [3]. Greenstone (2003) used the data of US steel companies from 1987 to 1997 and found that the implementation of the Clean Air Act reduced the companies air pollution emissions by an average of 15% [4]. In their analysis of the effects of environmental regulations and pollution regulation on U.S. manufacturing pollution emissions, Shapiro and Walker (2018) discovered that pollution regulation can account for more than 75% of those reductions [5]. Li et al. (2020) and Li et al. (2021) looked at how well China's policy of charging and taxing pollution worked and found that the system has significantly cut emissions [6-7]. Most research on environmental administrative penalties is based on data from microenterprises, finding that such penalties have a clear effect on reducing emissions. Foulon et al. (2002) took a sample of 20 British Columbia paper mills from 1987 to 1996 and found that environmental penalties and public environmental information disclosure can significantly inhibit environmental pollution [8]. Blundell (2020) used the 2007–2014 US Environmental Protection Agency (EPA) regulatory data on stationary pollution sources and, based on the double difference method, found that the increase in fines after 2012 improved corporate compliance and reduced pollution emissions [9]. Bu and Shi (2021) evaluated the daily continuous penalty policy through the DID method and found that the daily penalty policy significantly reduced industrial SO2 emissions [10].

However, some studies believe that these measures are not effective for environmental governance. For example, Wang et al. (2004) compared China’s sulfur dioxide emissions from 1990 to 2000 and found that some pollutant emission trading markets in China mainly traded through pressure and instructions, not market-driven [11]. Chang and Wang (2010) found that China's emissions trading policies are often proposed in conjunction with other environmental protection policies, and they only exist on the surface in many regions [12]. From the perspective of institutional diffusion and innovation, Shin (2013) found that China's emission trading policy has a "bringing doctrine" and ignores the localization of the policy, so it has not achieved the effect of emission reduction in China [13]. Duflo et al. (2018) found that regulatory experiments have little effect on corporate pollution emissions as long as regulatory agencies have weak enforcement measures, strict environmental standards, and high pollution levels [14]. Brunel and Johnson (2018) used U.S. GHG emissions data and changes in U.S. state pollution regulations to estimate the impact of pollution control regulations on GHG emissions and found no evidence that stricter local pollution regulations would change non-energy sector greenhouse gas emissions. gas emissions [15].

In addition, some studies also believe that environmental regulation will actually increase pollution. Gronwald et al. (2013) used an extended Hotelling-type resource extraction framework to study the effects of two suboptimal clean energy policies. They found that no matter what kind of environmental regulation is used, it will lead to a certain amount of "green paradox" [16]. Gibson (2019) used the panel data of US companies from 1992 to 2014 as a research sample to test the impact of the Clean Air Act on specific regional regulations on pollution emissions and found that the ratio of water and air pollution emissions from regulated companies increased by 177% [17].

There are few studies on "overseeing the government." Based on the results of this research, these studies can be divided into two groups. One type of research argues that "overseeing the government" has made it much easier to follow environmental laws and cut pollution emissions. Some studies, such as Kahn et al. (2015) and Wu and Zhang (2018) have examined the environmental governance effect of the environmental protection target responsibility system [18-19]. They found that the environmental protection target responsibility system greatly reduces the emission of target pollutants; However, the system does not do much for non-target pollutants. Chen et al. (2018) tested the effect of environmental protection targets and found that the policy led to a significant decline in CO2 emissions and GDP growth [20]. Wu and Zhang (2018) tested the emission reduction targets and the environmental governance effects of the new performance management system and found that only air pollutants were reduced, while water pollutants and other non-target pollutant emissions had no significant impact [21]. Some studies have also examined how the central environmental inspector affects them. Zhang et al. (2018) used 20,607 polluting companies in China from 2005 to 2009 as a sample. They used breakpoint regression to test how well central supervision improved local enforcement of environmental laws and found that it cut COD emissions by 26.8% [22]. Jia and Chen (2019) used the DID model to look at the short-term and long-term policy effects of the central environmental protection inspection. They found that the central environmental protection inspection had a positive effect on environmental performance over a long period of time [23]. Tan and Mao (2020) tested the effectiveness of central environmental protection inspectors in improving air quality through discontinuity regression based on daily data from 286 cities in China. The effect of the policy on lowering the Air Quality Index (AQI) was found to be insignificant [24].

Another part of the study starts with an environmental protection interview and the river chief system and other policies, finding that both implement environmental policies by making the roles of key leaders clear and greatly reducing pollution [25]. Zheng et al. (2014) used the data of 86 cities in China from 2004 to 2009 as a research sample and found that the central government and the public have improved environmental quality by putting pressure on local governments [26]. Chen et al. (2018) based on data from 85 cities located in the Yangtze River Basin from 2003 to 2009, found that environmental protection targets significantly reduced water pollution activities [27]. Some researchers have argued that "overseeing the government" fails to strengthen environmental regulation and makes it difficult to improve environmental quality [28-30].

To sum up, although "overseeing the government" started relatively late, its role in the field of environmental protection cannot be underestimated. The above studies have fully explored the impact of "overseeing enterprises" and "overseeing the government" on pollution control and emission reduction and laid a solid foundation for further research on the policy effect of "overseeing the government". However, there is a lack of data support for Chinese micro-enterprises as well as a systematic study of corporate environmental behavior choices at the theoretical level. As a unique Chinese experience, it is very important to put forward a Chinese plan in the field of environmental protection and to test the effect of "overseeing the government" and the path of emission reduction. For this reason, it is even more necessary to study the mechanism of the impact of "overseeing the government" on corporate emission reduction and to verify the effectiveness of China's experience. Although the policy effect of "overseeing the government" has been fully studied, the mechanism test on the emission reduction of microenterprises and the theoretical analysis that goes with it have not been fully conducted. On this basis, this study establishes an evolutionary game model between a local government and an enterprise to study how enterprises act. Using the policy as a natural experiment and the difference-in-differences (DID) method, we examine the effect of "overseeing the government" on enterprise emission reduction and analyze the path of enterprise emission reduction.

Compared to previous studies, this study makes the following marginal contributions: First, it builds an evolutionary game model between a local government and an enterprise to examine the strategic choices made by enterprises and governments. Theoretical analysis of corporate environmental behavior choices and possible emission reduction paths. Second, from the perspectives of source prevention and end control, we examine the path of corporate emission reduction and add to the research that has already been conducted. Third, starting from the emission reduction data of micro-enterprises, it provides evidence for the emission reduction of micro-enterprises in China for existing research. The rest of this paper is organized as follows: The third section is the theoretical framework, which builds a theoretical framework and looks at the logic of the enterprise's behavior. In the fourth section, is data and methodology, sample descriptions and factual characteristics are listed. The fifth section is the results and discussion, which uses the DID method to test the impact of the policy on corporate emission reduction and discusses the emission reduction path. The sixth section presents the conclusions and suggestions.

 

Point 3: The structure of the manuscript doesn’t match the typical structure: no literature review, general methodology, discussion.

Response 3: We take this recommendation very seriously. Based on this suggestion, we restructured the article and added a literature review, general methodology, etc.

Point 4: The hypotheses are rather abstract. It doesn’t meet complex calculations going further.

Response 4: We take this comment very seriously and have revised it accordingly. We reorganized the theoretical assumptions and referred to the relevant literature. Relevant expressions have been modified; it may be that the two behavioral choices of local governments and enterprises make the reviewers feel that the assumptions are stricter. We gave him a weight to represent their degree of regulation and emission reduction. The greater the weight, the closer it is to strict regulations and complete emission reductions. However, it is difficult to have a weight of 0 or 1 in real life, which makes our work closer to reality.

Point 5: The contribution of the results achieved and their practical significance are not clear.

Response 5: We strongly agree with the reviewer's comments and make targeted revisions. Reorganized the conclusion of the article and put forward targeted suggestions. The details are as follows:

This study analyzes the choice of enterprises against the background of "overseeing the government" by establishing a two-sector evolutionary game model of local government and enterprises. And using the microscopic data of Chinese industrial enterprises from 2001 to 2010, the DID method is used to empirically study the impact of "overseeing the government" on the discharge of water and air pollutants from Chinese enterprises. At the same time, further explore the path of corporate emission reduction. The study found that "overseeing the government" significantly reduced the intensity of chemical oxygen demand and sulfur dioxide emissions and achieved total emission reductions. In terms of source prevention and control, enterprises mainly reduce pollution emissions by increasing the use of clean energy and reducing the use of traditional energy. In terms of terminal treatment, enterprises mainly reduce emissions by increasing pollution control equipment. At the same time, there is no evidence of enterprises reducing emissions through production reduction. It can be seen that, from the perspective of production, environmental governance has less impact on enterprise output. Therefore, environmental protection and economic development are not in an either-or relationship. Properly handling the relationship between environmental protection and economic development is of great significance not only to China's sustainable development but also to the cause of sustainable development in the world, so as to realize the 17 sustainable development goals proposed by the United Nations as soon as possible.

Based on the above research findings, we emphasize the following aspects to fully leverage the initiative of enterprises in pollution control and emission reduction:

First, the central government should maintain appropriate supervision and link local government performance appraisals with environmental protection. This suggestion applies not only to the Chinese government but also to other countries around the world. According to the national conditions of each country, countries with different systems have formulated corresponding supervision mechanisms to supervise the implementation of local government policies and reduce collusion between government and enterprises.

Second, further reducing the cost of clean energy will help reduce pollution emissions at the source. At present, the price of clean energy is generally higher than that of traditional fossil energy around the world. In order to make enterprises more willing to choose clean energy, the first step is to reduce the price of clean energy. On the one hand, by encouraging technological progress and increasing investment in new energy, we can fundamentally lower the price of clean energy. On the other hand, increase the price of traditional energy by imposing a carbon tax and other means.

Third, local governments should improve the centralized treatment capacity of wastewater, urge enterprises to install pollution treatment equipment, and reduce emissions of waste gas pollutants. For water pollution, the establishment of wastewater treatment plants is very important, but the investment in wastewater treatment plants is relatively high, and some small and medium-sized enterprises are unable to build wastewater treatment plants. Therefore, it is necessary for cities to build sewage treatment plants to deal with water pollution problems and reduce the phenomenon of companies smuggling and leaking sewage due to insufficient governance capabilities. As for air pollution, installing dust removal, desulfurization, and other equipment on the chimney of the factory can reduce the pollutants discharged into the air, and most enterprises can afford the installation cost. This advice applies not only to Chinese companies but also to other companies around the world.

Author Response File: Author Response.docx

Round 2

Reviewer 2 Report

 Accept in present form

Reviewer 3 Report

The paper has been significantly improved. All the comments and recommandations have been taken into consideration. Thank you