<p>The rising global concerns about climate change have led to the implementation of stringent decarbonization policies, yet their financial implications for high-carbon businesses remain underexplored. This study aims to investigate the impact of decarbonization policies on the default risk of high-carbon enterprises in China, focusing on how these policies influence financial stability and corporate performance. Using firm-level data from Chinese A-share listed companies spanning 2000–2020, we employ a Difference-in-Differences (DID) econometric model to assess the relationship between policy implementation and default probability, with robustness tests including PSM-DID and placebo analysis. The results reveal that (i) the introduction of decarbonization policies significantly increases the default risk of high-carbon enterprises, (ii) the cost of debt and declining profitability act as mediating channels through which policies amplify default risk, (iii) heterogeneity analysis indicates that small-scale firms and companies in the growth phase are more vulnerable compared to large or mature firms, (iv) innovation in low-carbon technology and digital transformation effectively mitigate the adverse impact of decarbonization policies, and (v) the findings remain robust after controlling for other green policies and major events such as the 2008 financial crisis and COVID-19 pandemic. The evidence underscores the need for policymakers to design balanced decarbonization strategies that reduce emissions while providing targeted support for high-carbon firms to enhance financial resilience and ensure sustainable economic development.</p>