Will the slow speed badge increase abandonment rate?

Most probably yes, especially if a user comes from a mobile device. Google says the intent is to warn users which sites are slow before they click a link. A warning about a slow site experience before a user clicks through may cause users to abandon the click and opt for a faster loading site.
This means that in future having a fast website will become more and more important to be sure to not lose visits. Google wants to reward fast web pages, possibly at the expense of slow pages.