This research exploits Australia's ratification of the Kyoto Protocol, which mandates the country to reduce carbon emissions, thereby exposing Australian firms to increased carbon risk, as a quasi-natural experiment to examine the causal effect of carbon risk on firm capital structure. We find...

This paper examines the effect of carbon risk on firm performance, exploiting the Australia ratification of Kyoto Protocol in December 2007 as an exogenous shock. The paper finds that polluters, firms in highest-emitting industries, experience a reduction in financial performance relative to...

This paper examines the impact of carbon risk on firms' financing costs. We exploit the Kyoto Protocol ratification (hereafter KPR) committed by the Australian government in December 2007 as an exogenous increase in carbon risk. We find that, in the post-KPR period, firms with high carbon...