The Pie: An Economics Podcast
Pricing Pollution: Measuring Carbon Externalities for US Corporations
Nov 26, 2024
Lubos Pastor is a distinguished finance professor at the University of Chicago Booth School of Business, delving into the hidden costs of corporate greenhouse gas emissions. He discusses redefining corporate value to include environmental impacts, emphasizing the need for innovative metrics. The conversation also highlights the implications of the Paris Agreement on U.S. emissions, addressing how consumer behavior influences energy demand. Finally, a lightning round reveals personal reflections on economics and its real-world significance, peppered with humor.
23:44
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Quick takeaways
- Corporate value should reflect not only financial metrics but also the social and environmental costs it imposes on society.
- The stark contrast between corporate emission reduction targets and national goals highlights the urgency for businesses to adopt more ambitious climate strategies.
Deep dives
Corporate Value Beyond Profits
Corporate value encompasses more than just financial metrics such as share price and profits; it includes the broader impact on stakeholders like employees and consumers, as well as externalities that affect third parties. Companies can create both positive externalities, such as technological advancements, and negative externalities, such as carbon emissions. These externalities are significant because they often go unaccounted for in traditional financial assessments, leading to a skewed understanding of a company's true value. By recognizing these additional dimensions of value, corporations can better align their operations with societal expectations and environmental responsibilities.
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