We use the political theory of regulation to explore whether environmental regulations affect state-owned enterprises (SOEs) and non-state-owned enterprises (non-SOEs) differently. We argue that SOEs and non-SOEs face different regulatory risks from the introduction of environmental regulation, which leads to different environmental performance and economic consequences. Leveraging the staggered introduction of 56 cleaner production standards (CPSs) in China between 2003 and 2010, this study utilizes a difference-in-differences design to investigate how these CPSs impact SOE and non-SEOs differently in their environmental performance and economic consequences. We find that the positive effect of CPSs on firm environmental performance is greater for non-SOEs than SOEs, and this positive effect of CPSs on firm environmental performance in non-SOEs is weakened by political connection and corporate philanthropy. We also find that non-SOEs experience greater negative effects of CPSs on access to bank loans, firm investment, and financial performance than SOEs. Taken together, our findings suggest that using command-and-control regulation to address environmental challenges entails economic consequences, and non-SOEs, especially those not closely linked to the government, do the heavy lifting in environmental protection, not SOEs.