Using Credit Default Swap spreads, we construct a forward-looking, market-implied carbon risk factor and show that carbon risk affects firms' credit spread. The effect is larger for European than North American firms and varies substantially across industries, suggesting the market recognises...

Using Credit Default Swap spreads, we construct a forward-looking, market-implied carbon risk factor and show that carbon risk affects firms’ credit spread. The effect is larger for European than North American firms and varies substantially across industries, suggesting the market recognises...

Carbon credit trading regimes put a cost-efficient price on carbon emissions and foster investments in clean and low carbon technologies. As there are new carbon credit mechanisms evolving and old ones struggling we concentrate on the question what determinants make a carbon credit project...

Equilibrium models have been widely used in literature with the aim of showing theoretical properties of emission trading systems. This paper derives first a new equilibrium model. Second, it is shown that the theoretical permit price is related to changes in the expectation about how long...