Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278577 
Year of Publication: 
2023
Series/Report no.: 
ECB Working Paper No. 2813
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
Using evidence from the EU emissions trading system, we collect verified emissions of close to 4000 highly polluting and mostly non-listed firms responsible for 26% of EU's emissions. Over the period 2013-2019, we find a non-linear relationship between leverage and emissions. A firm with higher leverage has lower emissions in subsequent years. However, when leverage exceeds 50%, a further increase is associated with higher emissions. Our difference-in-differences approach sheds light on the existence of a group of firms that are too indebted to successfully accomplish the low-carbon transition, even when they face a steep increase in the cost of their emissions.
Subjects: 
low-carbon transition
climate change
debt finance
transition finance
EU ETS
JEL: 
C58
E58
G32
Q51
Q56
Q58
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-6076-2
Document Type: 
Working Paper

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