externalities and their cost of debt using data on European corporate bonds. For direct environmental costs as well as for carbon … emissions, we find that policy is a key driver of the capital market's valuation of these externalities. The size as well as … direction of the effect of externalities on bond spreads depends on the stringency of policy and a firm’s pollution- and carbon …

has been made to 'green' the economy, an important challenge that remains is to internalize global and local externalities …

-consistent policy rules that implement the stochastic first best as long as a future market exists. We apply our theory to carbon …

Although market-based environmental policy instruments feature prominently in economic theory and are widely employed …