An empirical analysis of climate and environmental policy risk, the cost of debt and financial institutions' risk preferences
研究了气候与环境政策严格程度如何影响不同能源的债务成本和金融机构的投资偏好，发现政策越严格，可再生能源的借贷成本相对化石能源越低，资本流向可再生能源的概率增加。
This study examines the impact of regulatory risk on the cost of debt and investment preferences across energy sources. We use the OECD Environmental Policy Stringency Index, loan spreads and investment decisions as measures of climate and environmental (CE) policy risk, cost of debt and risk preferences, respectively. We find that the stringency of CE policy risk influences investors' assessment of investment risks and capital allocation across energy sources. In the energy production sector, we observe that greater stringency in CE policies (such as carbon trading schemes) is associated with lower borrowing costs for renewable energy compared to fossil fuels, leading to increased investment in renewables. Moreover, as CE policies become more stringent in a country, the probability of capital flowing into Oil & Gas or coal diminishes. In the electric utilities sector, we provide evidence that CE policies (solar & wind support policies) effectively attract more capital to renewable electric utilities. • We study the impact of climate and environment (CE) policy on the cost of debt and risk preferences across energy sources in the loan market. • We find that the stringency of CE policies risk is priced by financial institutions, which influences their investment choices among energy sources in the loan market. • In the energy production sector, the cost of debt for renewable energy is higher than that of conventional energy sources. However, the introduction of a higher level of CE policy stringency brings this capital cost down and induces lenders to issue cheaper loans to renewable firms. • In the electric utilities sector, solar and wind support policy instruments, are shown to attract loan investments to renewable firms.