We use perturbation methods to derive a rule for the optimal risk-adjusted social cost of carbon (SCC) that … different aversions to risk and intertemporal fluctuations, convex damages, uncertainties in economic growth, atmospheric carbon …-run climate feedbacks. Our non-certainty-equivalent rule for the SCC incorporates precaution, risk insurance, and climate …

We propose and implement a procedure to dynamically hedge climate change risk. We extract innovations from climate news … change hedge portfolios. We discipline the exercise by using third-party ESG scores of firms to model their climate risk … exposures. We show that this approach yields parsimonious and industry-balanced portfolios that perform well in hedging …

the impact of the recent reform on allowance prices. By including bounded rationality such as myopia or hedging …-ante in the decision making of the firms. Myopia and hedging requirements have little impact in the prereform market but … strongly drive market outcomes after the reform. In the post-reform market, hedging requirements in combination with …

to higher delinquencies and interest rates, while exports are unaffected. Natural and financial hedging successfully mute …