IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/19668.html

Carbon Burden

Author

Listed:
  • Pástor, LuboÅ¡
  • Stambaugh, Robert F.
  • Taylor, Lucian

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.

Suggested Citation

  • Pástor, LuboÅ¡ & Stambaugh, Robert F. & Taylor, Lucian, 2024. "Carbon Burden," CEPR Discussion Papers 19668, Centre for Economic Policy Research.
    • Handle: RePEc:cpr:ceprdp:19668
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP19668
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ahn, Byung Hyun & Dutta, Sunil & Patatoukas, Panos N., 2025. "Corporate carbon overhang: Valuing corporate exposure to future carbon costs," Energy Economics, Elsevier, vol. 152(C).

    More about this item

    Keywords

    ;

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:19668. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CEPR (email available below). General contact details of provider: https://cepr.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.