Climate change is a phenomenon beset with major uncertainties and researchers should include them in Integrated Assessment Models. However, including further dimensions in IAM models comes at a cost. In particular, it makes most of these models suffer from the curse of dimensionality. In this...

This paper examines the strategic interactions of two large regions making choices about greenhouse gas emissions in the face of rising global temperatures. A focus is on three central features of the problem: uncertainty, the incentive for free riding, and asymmetric characteristics of decision...

Combining euro-area credit register and carbon emission data, we provide evidence of a climate risk-taking channel in banks' lending policies. Banks charge higher interest rates to firms featuring greater carbon emissions, and lower rates to firms committing to lower emissions, controlling for...

This paper explores the failure of countries to coordinate climate policies as an equilibrium outcome of a game where countries optimize in the face of both unprecedented economic and environmental uncertainty. Because issues associated with climate change are historically unprecedented and thus...

We examine climate transition risk in New Zealand (NZ) equities given that NZ's greenhouse gas (GHG) emissions are dominated by agricultural emissions and that carbon pricing has been in place since 2008. Only around half of NZX50 companies disclose emissions and that disclosure is driven by,...

We investigate whether credit rating agencies incorporate climate risk in their rating models. As climate risk is not well defined, we implement several identification strategies using a sample of U.S. cities whose creditworthiness should vary with climate risk–related disruptions to their...

We examine the effect of climate change risks (CCR) on firms' decision of engaging in mergers and acquisitions (M&A). Using two-stage residual inclusion estimation for 1,118 deals of listed US firms during 2010-2020 and consistent with risk vulnerability theory, our evidence indicates that firms...

This study assesses the global economic consequences of climate-related risk in three broad areas: (1) the macroeconomic impacts of physical climate risk due to chronic climate change associated with global temperature increases and climate-related extreme shocks; (2) the macroeconomic effects...

Climate change is a phenomenon beset with major uncertainties and researchers should include them in Integrated Assessment Models. However, including further dimensions in IAM models comes at a cost. In particular, it makes most of these models suffer from the curse of dimensionality. In this...

The paper incorporates qualitative differences of probabilistic beliefs into a rational (or normatively motivated) decision framework. Probabilistic beliefs can range from objective probabilities to pure guesstimates. The decision maker in the present model takes into account his confidence in...