The impact of difficulty and expensive financing on energy industry conservation and emission reduction

Xia Zihan

International Journal of Industrial and Systems Engineering, 2025, vol. 50, issue 1, 58-74

Abstract: This article separates the issues of financing difficulties and high financing costs, and studies the impact of financing difficulties and high financing costs on the energy-saving and emission reduction behaviour of enterprises. We find that when the problem of difficult financing for enterprises exists, the approved loan amount positively affects the level of energy conservation and emission reduction through production volume. The level of energy conservation and emission reduction is not related to the loan interest rate. The fixed cost investment in energy conservation and emission reduction is a major factor for enterprises to take energy conservation and emission reduction measures. Even with financing difficulties, because of the existence of carbon taxes and subsidies, companies tend to adopt energy-saving and emission reduction measures. The heterogeneity of enterprise scale only exists when financing difficulties exist. Once financing difficulties are resolved, there is no heterogeneity in the impact of enterprise scale on energy conservation and emission reduction levels. This means that the energy conservation and emission reduction levels of enterprises of different scales are ultimately the same.

Keywords: difficulties in financing; high cost of financing; energy conservation and emission reduction; carbon tax; subsidy. (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijisen:v:50:y:2025:i:1:p:58-74

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