Methane abatement and geoengineering have a short-lived effect on temperature compared with carbon abatement. Different optimal tax paths for these actions arise in a cost-benefit framework with an unknown temperature threshold where severe and irreversible climate impacts, called a tipping...

The macro-financial transition risks that result from disorderly transitions to a carbon-free or low-carbon economy may entail significant costs due to the risk of stranded assets, defaults, collapse in stock market value, both for financial firms and non-financial firms. The effects of...

We develop a dynamic model where heterogeneous firms take investment decisions depending on their beliefs on future carbon prices. A policy-maker announces a forward-looking carbon price schedule but can decide to default on its plans if perceived transition risks are high. We show that weak...

We develop a dynamic model where heterogeneous firms take investment decisions depending on their beliefs on future carbon prices. A policy-maker announces a forward-looking carbon price schedule but can decide to default on its plans if perceived transition risks are high. We show that weak...

We develop a dynamic model where heterogeneous firms take investment decisions depending on their beliefs on future carbon prices. A policy-maker announces a forward-looking carbon price schedule but can decide to default on its plans if perceived transition risks are high. We show that weak...