LAUSR

Abstract Green Mining Construction (GMC) is the Chinese national strategy of the environmental regulation of the mining industry to motivate mining enterprises to improve their resource utilization efficiency, protect the environment and harmonize the relationship between enterprises and communities. This paper uses system dynamics (SD) and the Malmquist-Luenberger (ML) Index to model the sustainable effect of the policy instruments of Green Mining Construction, namely, environmental taxes and subsidies. A case study of typical coal mining enterprises in Anhui, China, is provided to demonstrate the application of the proposed model in which the corporate performances of three optional strategies in response to the Green Mining Construction policies are examined. The responsive strategies are categorized as scale expansion, technical innovation and environmental protection. The simulation results show the following: (i) The environmental taxes and subsidies with disparate rates can help enterprises that focus on technical innovation and environmental protection perform better, albeit with a certain degree of lag. (ii) The synergy impact of subsidies and taxes is not significantly more than the separate ones. (iii) Environmental regulations reduce the productivity of mining enterprises, but to varying extents. This negative effect of environmental regulation should be compensated by other measures. This study offers insights to help enterprises select optimal strategies in response to the Green Mining Construction policies and to inform the government of possible sustainable policy designs to promote the Green Mining Construction. The limitations of the model are discussed for further improvements in simulating the effect of environmental regulation.