Carbon Burden

Lubos Pastor, Robert Stambaugh and Lucian A. Taylor

No 33110, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: D62 G30 G38 Q51 Q54 (search for similar items in EconPapers)
Date: 2024-11
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