This paper uses insights from decision theory under uncertainty to explore research challenges in climate economics. We … embrace a broad perspective of uncertainty with three components: risk (probabilities assigned by a given model), ambiguity … for using models to provide policy guidance. The uncertainty components and their implications for decision theory help us …

of climate risk that is significantly amplified and increasing in magnitude as climate change increases due to aversion …

composition of the optimal mix as both persuade the risk-averse social planner to invest more in mitigation. Overall, we identify …

difficulties identified with IAMs, the choice of the risk aversion parameter and the underestimation of damages, are also directly …

assessment model (IAM) with long-run risk, adapting methods from the asset pricing literature to deal with endogenous climate … risk. The model solves in closed-form for general degrees of risk aversion, stochastic climate feedbacks, and a stochastic …

Climate change has become one of the most prominent concerns globally. In this paper, we study the transition risk of … and output growth during the transition risk. With optimal carbon price designs, it should react even less to inflation …