Carbon Burden

Pástor, Luboš, Robert F. Stambaugh and Lucian Taylor
Authors registered in the RePEc Author Service: Lubos Pastor

No 19668, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We compute the U.S. corporate sector's ``carbon burden"---the present value of social costs of future carbon emissions. Our baseline estimate is 131% of total corporate equity value. Meeting the Paris Agreement goals would reduce the burden by roughly one-fourth, but emissions forecasts and firms' own targets fall short of that reduction. 13% of firms have carbon burdens exceeding their market capitalizations, even with indirect emissions excluded. Firms with higher carbon burdens have higher costs of capital, even after controlling for past emissions. Only a small fraction of the burden is priced through that channel, however.

Keywords: Externality (search for similar items in EconPapers)
JEL-codes: D62 G30 G38 Q51 Q54 (search for similar items in EconPapers)
Date: 2024-11
New Economics Papers: this item is included in nep-ene, nep-env and nep-fmk
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Citations: View citations in EconPapers (1)

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Working Paper: Carbon Burden (2024)
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