Banking on Carbon: Corporate Lending and Cap-and-Trade Policy

• 成果类型: Article
• 署名作者: Ivanov, Ivan T.; Kruttli, Mathias S.; Watugala, Sumudu W.
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - Chicago; Indiana University System; Indiana University Bloomington; IU Kelley School of Business
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhad085
• 发表日期: 2024
• 页码: 1640
• 关键词: credit; debt; cost; externalities; incentives; lines; RISK

摘要

We estimate the effect of carbon pricing policy on bank credit to greenhouse-gas-emitting firms. Our analyses exploit the geographic restrictions inherent in California's cap-and-trade bill and a discontinuity in the embedded free permit threshold of the federal Waxman-Markey cap-and-trade bill. Affected high emission firms face shorter loan maturities, lower access to permanent forms of bank financing, higher interest rates, and higher participation of shadow banks in their lending syndicates. These effects are concentrated among private firms, while credit terms of public firms are largely unaffected. Overall, we show that banks respond quickly to realizations of transition risk.