approaches to incorporating climate risk in macro-finance models. We then review the empirical literature that explores the … risk. We conclude by proposing several promising directions for future research in climate finance. …

derive a general analytic formula for the "risk premium" governing the resulting climate policy. The formula generalizes … making under uncertainty. It clarifies the distinct roles of risk aversion, prudence, characteristics of the damage … formulation, and future policy response. We show that an optimal response to uncertainty substantially reduces the risk premium. …

This paper examines the impact of transition and physical climate risk on stock markets using, for the first time in … results suggest a positive impact of transition risk on stock returns and a negative one of physical risk, especially in the … short term. Further, while physical risk appears to have an immediate impact, transition risk is shown to affect stock …

This study provides new evidence on the impact of climate physical risk (as measured by the Global Climate Risk Index … clusters on the basis of their degree of market capitalisation. The results suggest a negative impact of climate physical risk …

proposing a novel news media-based measure of climate change transition risk and show that when such risk is high, major …

price, the equilibrium risk-free rate, and risk premia. Climate disasters, which are more likely to occur sooner as … temperature rises, significantly increase risk premia. …

We develop a financial-economic model for carbon pricing with an explicit representation of decision making under risk … specifications. We show that risk associated with high damages in the long term leads to stringent mitigation of carbon dioxide … emissions in the near term. Our results provide insight into how a systematic incorporation of climate-related risk influences …