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...

The European low-carbon transition started in the last decades and is accelerating to reach net-zero by 2050. I study how the climate-related transition risk of a European large corporate firm relates to its CDS-implied credit risk for different time horizons. I find that firms with higher GHG...

Various stakeholders are increasingly encouraging companies from the real economy to adopt measures facilitating their transition towards carbon neutrality. In this context, companies are expected to implement forward-looking strategies and climate-related reporting practices using scenario...

As the European carbon border adjustment (CBA) mechanism is high up on the European Commission's agenda and soon to be implemented, it is important to understand the economic and environmental implications of alternative designs of such a mechanism. To this end and with a view to informing the...

The European Union's Emissions Trading System is the largest system in the world for trade in greenhouse gases. It used to be a cap-and-trade scheme with a fixed supply of permits. However, a recent reform of the system "punctures the waterbed" by making the supply of permits endogenous. The...

This paper presents the potential benefits and challenges of enhanced international co-ordination on carbon pricing and outlines the different types and levels of co-ordination that are available for national and sub-national governments. These levels include, inter alia, facilitating new...

A drastic decline in global greenhouse gas (GHG) emissions is needed to stop the climate change. This requires a variety of political and market mechanisms. Europe is globally at the forefront among the industrialised countries in reducing its GHG emissions. We analyse the development of...

The European low-carbon transition began in the last few decades and is accelerating to achieve net-zero emissions by 2050. This paper examines how climate-related transition indicators of a large European corporate firm relate to its CDS-implied credit risk across various time horizons....

This study provides an empirical investigation of the price volatility — trading volume relationship for the Carbon Financial Instrument (CFI). A CFI is a financial contract that is traded on the Chicago Climate Exchange (CCX) and represents the right to emit 100 metric tons of CO2 equivalent....