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This paper proposes a conceptual and analytical framework of states' legitimacy-seeking to comprehensively investigate the motivation behind China's climate and environment policy. While previous research has largely overlooked political factors that underlie China's climate policy, this paper argues that these factors are crucial in understanding China's policy changes, which are evident at both domestic and international levels. By examining sources such as government documents, leaders' speeches and authoritative literature, this study contends that China's climate change initiatives are part of a broader effort to enhance domestic and international legitimacy. The issue of climate change has become highly politicised in China under the leadership of President Xi Jinping, and it serves as a crucial test of the ruling party and the state's capacity to govern effectively. As such, legitimacy-seeking is the key driver that links China's domestic measures and international commitments. [ABSTRACT FROM AUTHOR]

This paper matched the data for all non-financial listed firms in China from 1990 to 2017 with weather data and used temperature and precipitation to represent climate change. Using daily temperature and daily precipitation data, we constructed temperature bins and precipitation bins. This study presents a potential first empirical analysis that applies the risk perception theory to comprehensively examine the impacts of daily temperature and daily precipitation on firms' debt financing costs. Compared to a day with a suitable temperature, a day with temperatures above 30 °C increases firms' debt financing costs by 0.2411%. Compared to a sunny day, a day with torrential rain increases firms' financing costs by 0.2697%. Approximately $122.13 million and $20.49 million in extra costs were incurred across all firms in 2017. We conducted a series of heterogeneity tests. We found that the negative impacts of climate change on debt financing costs are greater for firms that investor considers more vulnerable. Finally, we found two possible mechanisms. First, from the firm's subjective initiative perspective, firms that respond proactively during seasons of high temperatures and heavy rains can reduce the negative impacts. Second, adverse weather caused by climate change may also increase firms' debt financing costs by blocking travel. These results enrich the literature on firms' debt financing costs and contribute to the understanding of climate change's impact on firms. [Display omitted] • An extra high-temperature day increases firms' debt financing cost by 0.2411%. • An extra heavy-rain day increases firms' debt financing costs by 0.2697%. • The negative impacts will be greater for those firms that investor considers more vulnerable. • Firms' response proactively can reduce the negative impacts. • Climate change also may increase firms' debt financing costs by blocking travel. [ABSTRACT FROM AUTHOR]