Efficiency of Environmental Regulation Oversight in the Cement Sector: Compliance and Development within the Framework of Inspection on Government

This study investigates the role of environmental regulations in balancing ecological conservation and cement industry development within the 'inspection on government' framework. Results show that implementing stringent environmental regulations and low industrial agglomeration levels while suppressing FDI can achieve a 'win-win' scenario for carbon reduction and maximising cement shipments. However, if FDI exceeds historical levels, consistently enforcing strict regulations and maintaining high industrial agglomeration are necessary. Additionally, when the market control variables satisfy the conditions of the 'optimisation trap', the maximum value of cement shipment remains lower than the results obtained from varying any single market variable. Furthermore, the 'optimisation trap' undermines the efficacy of our policy control variables adjustments, as any values assigned to the policy control variables become irrelevant to the optimisation procedure.