Study reveals how much carbon damage would cost corporations if they paid for their emissions

The world’s corporations produce so much climate change pollution, it could eat up about 44% of their profits if they had to pay damages for it, according to a study by economists of nearly 15,000 public companies.

The “corporate carbon damages” from those publicly owned companies analyzed — a fraction of all the corporations — probably runs in the trillions of dollars globally and in the hundreds of billions for American firms, one of the study authors estimated in figures that were not part of the published research. That's based on the cost of carbon dioxide pollution that the United States government has proposed.

Nearly 90% of that calculated damage comes from four industries: energy, utilities, transportation and manufacturing of materials such as steel. The study in Thursday’s journal Science by a team of economists and finance professors looks at what new government efforts to get companies to report their emissions of heat-trapping gases would mean, both to the firm’s bottom lines and the world’s ecological health.

Earlier this year, the European Union enacted rules that would eventually require firms to disclose carbon emissions and the United States Securities and Exchange Commission and the state of California are looking at similar regulations.

Study co-author Christian Leuz, a finance and accounting professor at the University of Chicago, said the idea “of shining the light on corporate activities that have costs to society is very powerful, but it is not enough to save the planet.” An earlier study of his found that after fracking firms disclosed their...