There are concerns that climate-related physical and political risks are not yet properly reflected in asset prices. To address these concerns, we develop a dynamic asset pricing framework with rare disasters related to climate change. The novelty of this paper lies in linking carbon emissions...

We propose an integrated methodology to evaluate the four possible socio-economic costs namely direct/indirect and tangible/intangible costs due to adverse consequences of flood. Although SERRA is based on full monetization of costs and benefits of risk, it can allow for other methods of...

A conceptual framework integrating different disciplines has been developed to comprehensively evaluate the benefits of risk prevention. Three main innovations are proposed with regards to the state of the art: (1) to include the social capacities of reducing risk, (2) to go beyond the...

Literature on climate change and extreme events has found conflicting and often weak results on the evolution of economic damages related to natural disasters, although climate change is likely to bring about an increase in their magnitude (Van Aalst, 2006; IPCC, 2007, 2012). These studies usually...

The social rate of discount is a crucial driver of the social cost of carbon (SCC), i.e. the expected present discounted value of marginal damages resulting from emitting one ton of carbon today. Policy makers should set carbon prices to the SCC using a carbon tax or a competitive permits...

There are concerns that climate-related physical and political risks are not yet properly reflected in asset prices. To address these concerns, we develop a dynamic asset pricing framework with rare disasters related to climate change. The novelty of this paper lies in linking carbon emissions...

Climate change adaptation efforts are heavily dependent on a country's fiscal capacity and the associated costs of undertaking adaptation policies. The current accumulation of high debt levels in emerging and low-income developing countries, which are disproportionately affected by climate...

In response to the growing threat of climate change, the insurance industry has made significant investments in modelling and quantifying physical climate risks. However, the emerging risk of climate litigation has proven particularly difficult to model. In 2015 Mark Carney, then-Governor of the...

The social cost of carbon is the expected present value of damages from emitting one ton of carbon today. We use perturbation theory to derive an approximate tractable expression for this cost adjusted for climatic and economic risk. We allow for different aversion to risk and intertemporal...

There has been very little research to test whether ambiguity affects individuals' decisions to insure themselves against the catastrophic effects of climate change. This paper attempts to study how individuals respond to the availability of an insurance that would safeguard their interests if a...