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CREDIT RATING &
The more a company is exposed to carbon price, the more likely their credit rating could be in jeopardy. For instance, Drax Power, which operates a coal-fired power plant in the UK, was downgraded to below investment grade, thus increasing borrowing costs and discouraging investment from institutional funds.
Induced by the regulation of carbon emission targets, the cost of capital for projects that are not carbon-reducing may increase in line with expectations for a carbon price.
-Green Rhino Energy
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