We quantify the U.S. corporate sector’s carbon externality by computing the sector’s “carbon burden”—the present value of social costs of its future carbon emissions. Our baseline estimate of the carbon burden is 131% of total corporate equity value. Among individual firms, 77% have carbon burdens exceeding their market capitalizations, as do 13% of firms even with indirect emissions omitted. The 30 largest emitters account for all the decarbonization of U.S. corporations predicted by 2050. Predicted emission reductions, and even firms’ targets, fall short of the Paris Agreement. Firms’ emissions are predictable by past emissions, investment, climate score, and book-to-market.

More on this topic

BFI Working Paper·Nov 5, 2026

The Economics of Transitioning Away from Fossil Fuels: A Contribution to the COP30 Presidency Roadmap

Robin Burgess and Michael Greenstone
Topics: Energy & Environment
BFI Working Paper·Nov 2, 2026

Green Tastes, Beliefs, and Portfolios: Evidence from Synthetic Investors

Xindi He and Lubos Pastor
Topics: Energy & Environment, Financial Markets
BFI Working Paper·Oct 21, 2026

Green Subsidies with Demand Distortions

Susanna B. Berkouwer and Joshua Dean
Topics: Energy & Environment