Carbon Credit Taxation and Financial Performance: Empirical Evidence from Himalayan Companies

Particularly in environmentally vulnerable areas like the Himalayas, the increasing focus on carbon control has made carbon credit taxes a key element affecting business financial success. Using panel data analysis of corporations from 2015 to 2024, this paper investigates the link between carbon credit tax and the financial success of businesses operating in the Himalayan area. Controlling for company size, debt, and industry-specific influences, the study uses profitability measures (ROA, ROE, and net margin) and firm value indicators (Tobin's Q) to evaluate financial results. The results show a non-linear link: moderate carbon taxes correspond with better financial efficiency from operational optimization; too high taxes harm profitability. Companies using proactive carbon management policies also show more financial resiliency. By means of empirical data from a geographically important yet underexplored area, our work adds to the conversation on sustainable financing and provides insights for politicians and business leaders juggling environmental compliance with economic viability.