We evaluate the effects of carbon risk on the speed at which corporations adjust their leverage for the period 2006–2020. Primarily we address the question: Does national carbon risk impact firm-level speed of adjustment (SOA)? To address the main question, our study further classifies the companies in the sample based on borrowing costs and carbon risk. By doing so, we report on how borrowing costs may influence the company's conduct. Our research focuses on the energy sector, which is an important sector for emitting carbon. Our study uses physical climate risk changes as a proxy for carbon risk, and the second proxy for carbon risk is obtained by scaling the country's carbon emissions to the company level. We find that the carbon risk is positively related to the speed of adjustment; specifically, the firms with low cost of borrowing show a faster speed of adjustment toward the target than those whose cost of borrowing is higher. However, businesses with high (low) expenses and high carbon risk do not see a reason to change their leverage. In addition, we also examine the interaction effects of earnings yield, transaction contract cost, enforcement cost on carbon risk, and the speed of leverage adjustment. Our results confirm that the effects of transaction contract costs and enforcement costs are significant. The post-Paris Agreement period reveals a strong positive relationship between carbon risk and leverage SOA.

中文翻译：

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碳风险动态、债务成本和杠杆调整

我们评估了 2006 年至 2020 年期间碳风险对企业调整杠杆速度的影响。我们主要解决这个问题：国家碳风险是否会影响企业层面的调整速度（SOA）？为了解决这个主要问题，我们的研究根据借贷成本和碳风险对样本中的公司进行了进一步分类。通过这样做，我们报告借贷成本如何影响公司的行为。我们的研究重点是能源部门，这是碳排放的重要部门。我们的研究使用物理气候风险变化作为碳风险的代理，而碳风险的第二个代理是通过将国家的碳排放量缩放到公司水平来获得的。我们发现碳风险与调整速度正相关；具体而言，借贷成本较低的企业比借贷成本较高的企业向目标调整的速度更快。然而，高（低）费用和高碳风险的企业没有理由改变其杠杆率。此外，我们还考察了收益率、交易合约成本、执行成本对碳风险以及杠杆调整速度的交互影响。我们的结果证实，交易合同成本和执行成本的影响是显着的。《巴黎协定》后时期揭示了碳风险与杠杆 SOA 之间存在很强的正相关关系。