This paper examines the relationship between future carbon prices and the expected profit of companies by case studies with model companies. As the future carbon price will vary significantly in accordance with the political and economic situation, a specified probability density profile for the carbon price in the future has been assumed in this paper and the expected profits of the model company have been calculated on the basis of this profile. A power company has been selected as the model company representing a typical instance of a large-scale emitter of CO2. In the case of a single-fuel using company, it has been established that the influence on corporate profits can be assessed quantitatively by determining the profit break-even line with the carbon price as the parameter using the company’s carbon emission intensity and its operating profit per unit of production output. For multi-fueled companies, it is shown that the future optimum fuel mix is determined not only by the carbon price but also by the operating profit ratio for the fuels concerned. These studies have thus confirmed that corporate profits are governed by the ratio of the operating profit levels achieved per unit of production output for the different fuels and the carbon price.Abstract in HTML and technical report in PDF available on the Massachusetts Institute of Technology Joint Program on the Science and Policy of Global Change website (http://mit.edu/globalchange/www/).