We survey the rapidly growing economic literature on environmental catastrophes and the various approaches developed to address the hovering threats. Various theoretical descriptions of catastrophic occurrences are classified with respect to the uncertain conditions that trigger the events, the...

Low probability catastrophic climate change can have a significant influence on policy under hyperbolic discounting. We compare the set of Markov Perfect Equilibria (MPE) to the optimal policy under time-consistent commitment. For some initial levels of risk there are multiple MPE; these may...