To study the welfare implications of rising temperature we propose a temperature-augmented long-run risks model that accounts for the interaction between temperature, economic growth and risk. The model simultaneously matches the projected temperature path, the observed consumption growth...

An estimate of the social cost of carbon (SCC) is key to climate policy. But how should we estimate the SCC? A common approach is to use an integrated assessment model (IAM) to simulate time paths for the atmospheric CO2 concentration, its impact on global mean temperature, and the resulting...