The paper derives the optimal carbon tax in closed-form from an integrated assessment of climate change. The formula shows how carbon, temperature, and economic dynamics quantify the optimal mitigation effort. The model's descriptive power is comparable to numeric models used in policy advising....

We investigate the economic impact of stochastic endogenous extreme events and insurance in a growth model. Our analytical results and computational experiments show that i) transparency of the insurance sector is the decisive requisite for abatement activities, implying substantial policy...

Climate feedback mechanisms that have the potential to intensify global warming have been omitted almost completely in the integrated assessment of climate change and the economy so far. With the present paper we try to narrow this gap in literature. We discuss different types of feedback...