The thesis contains three chapters, exploring a variety of economic and financial implications of environmental policies. In the first chapter, my co-authors and I examine the effectiveness of various policy measures that underlie the rapid development of the EV market in China, by far the world's largest such market. The analysis is based on detailed data on EV sales, local and central government incentive programs, and charging stations in 150 cities from 2015 to 2018. The empirical framework addresses the potential endogeneity of key variables, such as local policies and charging infrastructure, by using a city-border-regression design and instrumental variable approach. We find that consumer subsidies for vehicle purchases accounted for more than half of EV sales in China. Nevertheless, investments in charging infrastructure were much more cost-effective than consumer subsidies. An inexpensive policy that merely provided EVs with a distinctive, green license plate was strikingly effective. These findings demonstrate the varying efficacy of different policy instruments and highlight the critical role of the government in promoting clean technologies. In the second chapter, my co-authors and I study the investment decisions of high-emission firms in response to climate regulation risks. We build a model of firm financing and investment that predicts higher investment and borrowing prior to the regulatory shock for firms more exposed to the shock, and higher borrowing costs after the regulatory shock. In our empirical analysis, using the Paris Climate Accords as a shock to future climate regulation, we find evidence consistent with the model. High-emission private firms issue longer-maturity bonds, larger issue amounts and receive lower offering yields prior to the Paris Accords, but subsequently face tighter borrowing terms. Further, these high-emission firms have higher capital expenditures prior to the Paris Climate Accords. These effects are concentrated within the sub-sample of private firms, which are more emissions inefficient. Our findings show that high-emission firms that expect financing frictions to intensify under climate regulatory shocks can exhibit behavior consistent with a “green paradox,” where polluting firms increase ex ante investment in the expectation of future climate regulation. We discuss the possibility of multiple equilibria in the model where the expectation of future regulation drives the investment that eventually validates the increased regulation likelihood. The third chapter analyzes the effects of Renewable Portfolio Standards (RPS), a set of state-level policy requirements that mandate a minimum percentage or quantity of renewable energy in retail electric utilities' supply, on the financial performances of utilities. Using a difference-in-difference framework, I found that publicly traded utilities experience positive effects on operational revenue, expenses, construction, and service plants, while a more pronounced shift away from renewable plants is observed among non-publicly traded utilities. Publicly traded utilities are more financially robust and observe an overall non-significant impact on their leverage. These findings underscore the significance of financing capacity, market access, and strategic positioning in navigating the transition towards renewable energy sources.