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

economic model. Modern decision theory and its applications to finance show that this discounted expected utility model is … economic policy. We derive the optimal climate policies accounting for the full interaction between uncertain damage … incapable of simultaneously capturing adequate risk premia and a reasonable discount rate, leading to the equity premium and the …

(particularly over the possibility of a catastrophic climate outcome) creates insurance value, which pushes us to earlier and …