An economy faces an unknown individual risk, such as the health effects of a recently discovered environmental hazard. Opinions may be widely different about the distribution of risks across the population. We study financial markets that suffice to reach efficient allocations in this situation....

Energy security, economic development and averting global warming are conflicting objectives in a fossil fuel economy. In the long run, sustainable development requires a shift to renewable energy sources. In the short run the climate change problem requires swift action and different...