Financing the low-carbon transition in Europe

Arbeitspapier

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.

Object Details

• ISBN: 978-92-899-6076-2
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECB Working Paper ; No. 2813

Classification and Topics

• Classification: Wirtschaft ; Financial Econometrics ; Central Banks and Their Policies ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill ; Valuation of Environmental Effects ; Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth ; Environmental Economics: Government Policy
• Subject: low-carbon transition ; climate change ; debt finance ; transition finance ; EU ETS

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Carradori, Olimpia ; Giuzio, Margherita ; Kapadia, Sujit ; Salakhova, Dilyara ; Vozian, Katia
• Event: Veröffentlichung
• (who): European Central Bank (ECB)
• (where): Frankfurt a. M.
• (when): 2023

Further information

• DOI: doi:10.2866/354356
• Handle: http://hdl.handle.net/10419/278577
• Last update: 10.03.2025, 11:44 AM CET