difficulties identified with IAMs, the choice of the risk aversion parameter and the underestimation of damages, are also directly …

climate change. The risk of uncertain and potentially irreversible catastrophes is an important issue related to the latter … benchmark integrated assessment model. This study moves beyond recent catastrophe or tipping point studies with arbitrary risk … introduced here informs risk management strategies that balance uncertain future climate change impacts with the costs of …

-probability extreme events on environmental policy in a continuous-time real options model with “tail risk”. In a nutshell, our results … indicate the importance of tail risk and call for foresighted pre-emptive climate policies …

incapable of simultaneously capturing adequate risk premia and a reasonable discount rate, leading to the equity premium and the … risk-free rate puzzles. We follow the finance literature in disentangling risk aversion from the propensity to smooth … consumption over time, which gives rise to a model reflecting correctly the risk-free discount rate and the risk premia. We find …