About Energy Studies Institute
The Energy Studies Institute (ESI) seeks to advance the understanding of energy issues
by conducting independent research and analyses.
CLIMATE RISKS AND DEBT SPECIALIZATION
SEMINAR
Climate Risks and Debt Specialization
Dr Chunxia Jiang
Abstract
Climate risks, including physical, regulatory, and transition risks, affect both the cost and maturity of public and private debt. Examining climate risk’s impact on firms’ debt specialization is relevant due to debt being a primary external finance source and its increasing role in green financing. This talk presents the debt structure of a sample of U.S. firms exposed to climate risks from 2002 to 2020. It will show that physical and regulatory risks, propagating through the channels of expected bankruptcy cost and access to finance, increase debt specialization, while transition risk shows limited impact. Furthermore, the redeployability of assets and corporate sustainability can mitigate the impact of climate risks on firms’ debt structures through decreased debt specialization. Difference-in-difference tests reaffirm the effects of climate risks on debt structure.
About the Speaker
