Firms Face Value Discounts as Carbon Risks Soar Under EU Emissions Scheme
The study looked at how uncertainty in carbon prices affects the value of companies in the European Union Emission Trading Scheme. They found that when policy changes increased carbon risk for firms, those without enough carbon allowances saw their value decrease, even if carbon prices were low. This shows that exposure to carbon risk can impact how much a company is worth in a cap-and-trade system.