This paper studies a dynamic stochastic general equilibrium model involving climate change. Our frame- work allows for feedback effects on the temperature dynamics. We are able to match estimates of future temperature distributions provided in the fifth assessment report of the IPCC (2014). We...

We derive the optimal contributions to global climate policy when countries differ with respect to income level and pollution intensity. Countries' growth rates are determined endogenously, and abatement efficiency is improved by technical progress. We show that country heterogeneity has a...