Aligning finance to sustainability requires methodologies to price forward-looking climate risks and opportunities in financial contracts and in investors' portfolios. Traditional approaches to financial pricing models cannot incorporate the nature of climate risk (i.e. deep uncertainty,...

The finance literature on carbon risk focuses mostly on the extent to which this risk is currently priced in financial markets. This paper sheds light on a complementary question, i.e. what could be the level of potential carbon risk implied by different future climate policy scenarios. To this...