Environmental pollution liability insurance in China: compulsory or voluntary?

China started the trial application of Environmental Pollution Liability Insurance in 2008, as part of a wider development of using market actors and market mechanisms in mitigating environmental pollution. Around the world and in China two main patterns of local pollution insurance practices can be identified: voluntary and compulsory pollution insurance promotion. In order to assess experiences from local pollution insurance practices in China and to contribute to the construction of a national pollution insurance policy in 2015, comparative case studies were carried out on voluntary (Chongqing) and compulsory (Wuxi, Jiangsu province) pollution insurance. Based on the analysis of pollution insurance products, differences in local policies, involved governance structures, and stakeholder attitudes, differences in pollution insurance market development between Chongqing and Wuxi are illustrated. The results show that in contemporary China, compulsory pollution insurance promotion helps local governments to quickly build a relatively mature system of pollution insurance. But it is too early to draw conclusions on the contribution of pollution insurance to environmental risk mitigation and pollution victim compensation.