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 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 …

the risk-adjusted interest rate. Adding damages leads to a higher carbon price that grows more slowly. But as temperature …