@article{272028953a20490aad320ca8fd69ac35,
title = "Pricing uncertainty induced by climate change",
abstract = "Geophysicists examine and document the repercussions for the earth's climate induced by alternative emission scenarios and model specifications. Using simplified approximations, they produce tractable characterizations of the associated uncertainty. Meanwhile, economists write highly stylized damage functions to speculate about how climate change alters macroeconomic and growth opportunities. How can we assess both climate and emissions impacts, as well as uncertainty in the broadest sense, in social decision-making? We provide a framework for answering this question by embracing recent decision theory and tools from asset pricing, and we apply this structure with its interacting components to a revealing quantitative illustration.",
author = "Michael Barnett and William Brock and Hansen, {Lars Peter}",
note = "Funding Information: We thank James Franke, Elisabeth Moyer, and Michael Stein of RDCEP for the help they have given us on this paper. Comments, suggestions and encouragement from Harrison Hong and Jose Scheinkman are most appreciated. We gratefully acknowledge Diana Petrova and Grace Tsiang for their assistance in preparing this manuscript, Erik Chavez for his comments, and Jiaming Wang, John Wilson, Han Xu, and especially Jieayo Wang for computational assistance. More extensive results and python scripts are available at http://github.com/lphansen/Climate. The Financial support for this project was provided by the Alfred P. Sloan Foundation [grant G-2018-11113] and computational support was provided by the Research Computing Center at the University of Chicago. Send correspondence to Lars Peter Hansen, University of Chicago, 1126 E. 59th Street, Chicago, IL 60637; telephone: 773-702-3908. E-mail: lhansen@uchicago.edu. {\textcopyright} The Authors 2020. Published by Oxford University Press. This is an Open Access article distributed under the terms of the Creative Commons Attribution Non-Commercial License (http://creativecommons.org/licenses/by-nc/4.0/), which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is properly cited. For commercial re-use, please contact journals.permissions@oup.com doi:10.1093/rfs/hhz144 Publisher Copyright: {\textcopyright} 2020 The Authors.",
year = "2020",
month = mar,
day = "1",
doi = "10.1093/rfs/hhz144",
language = "English (US)",
volume = "33",
pages = "1024--1066",
journal = "Review of Financial Studies",
issn = "0893-9454",
publisher = "Oxford University Press",
number = "3",
}