Abstract:The development stage of the four regions of China determines the different goals of economic development and environmental protection. Choosing proper environmental regulation (ER) tools can effectively eliminate backward production capacity and stimulate technological innovation. This paper compares the cost effect, innovation effect and agglomeration effect of the four regions of China by using industrial panel data during 2004-2014; and analyzes the influence of ER tools on the investment location of polluting industries based on the model of SAC. Results show that ER tools showed significant differences among the four regions, that expense ER, investment ER and public participation ER have a significant innovation effect in the eastern regions, that expense ER and urban environmental infrastructure construction bring more cost pressure to polluting corporations in the middle regions; that construction project with “Three Simultaneous” investment and public participation ER effectively inhibit the inflow of polluting industries in western regions;that expense ER, industrial pollution control investment and construction project with “Three Simultaneous” investment effectively inhibit the inflow of polluting industries in northeast regions. Thus, it is proposed to select proper combination of ER tools to achieve green development of regional economy.