Research On The Emissions Trading System On Corporate Debt Default Risk

Severe environmental situation has become one of the most giant problems in the world.Reducing carbon dioxide and other greenhouse gas emissions has become a global consensus.Major countries in the world have signed the Paris Agreement to accomplish their respective emission reduction tasks.As a responsible major country,China has put forward a "dual carbon" target on carbon emission reduction.Thus,various policy measures has been adopted to successfully achieve emission reduction targets.The implementation of environmental regulations not only provides enterprises with the direction and motivation to reduce emissions,but also increases the pressure on enterprises to reduce emissions.High-carbon enterprises will face higher and higher debt default risks.Historical experience shows that large-scale debt defaults by micro-subjects are likely to affect the asset safety of financial institutions,and even lead to default risks in the financial system.Therefore,the paper is about to study the impact of environmental regulation on the risk of corporate debt default,so that enterprises can achieve their own stable growth while completing the task of reducing emissions.Carbon emissions trading has been actively deployed and implemented by many countries and regions around the world after the emission reduction agreement was signed.China has also launched the local pilot and national carbon emissions trading.At present,carbon emission trading policies are becoming much stricter,and the scope of industries included in the trading is constantly expanding.Thus this paper studies whether carbon emissions trading can alleviate the debt default risk of enterprises,and what actions enterprises can take to ensure their own stable growth.This paper first theoretically analyzes the impact of carbon emissions trading on corporate debt default risk,and proposes four hypotheses to be tested.In the empirical study,with the help of the quasi-natural experimental scenario of the establishment of local pilot carbon emission trading in China,using the difference in differences(DID)method,using data of A-share enterprises listed on the Shanghai and Shenzhen Stock Exchanges from 2010 to 2019,this paper first tested the impact of carbon emissions trading on corporate debt default risk,it is found that carbon emissions trading has a significant reduction effect on corporate debt default risk.After parallel trend test,placebo test,and PSM-DID test,the conclusion is still significantly established.This paper further studies the basic conditions for carbon emissions trading to significantly reduce the default risk of corporate debt,and finds that the high transition risk of enterprises inhibits the reduction effect of carbon emissions trading on corporate debt default risk;and the lower financing constraints,the stronger innovation ability of enterprises have significant impact on the risk of corporate debt defaults by carbon emissions trading.The research has certain significance for theoretical research and policy inspiration.This paper firstly expands the research scope of the economic consequences of environmental regulation from the perspective of corporate debt.The conclusions of this paper also have certain policy implications.First of all,in the context of low-carbon transition,Chinese pilot carbon emissions trading has the benefit of reducing the risk of debt default of trading enterprises.It is necessary to continue to develop and improve the pilot and national carbon emission trading system to flexibly adjust carbon emissions,and cooperate with subsidized environmental policies to reduce the environmental cost of enterprises.In addition,enterprises with high transition risks can reduce the negative impact of environmental regulations by effectively reducing emissions,easing financing constraints,and improving innovation capabilities.