The Social Cost of Carbon with Economic and Climate Risks

@article{Cai2019TheSC,
  title={The Social Cost of Carbon with Economic and Climate Risks},
  author={Y. Cai and Thomas S. Lontzek},
  journal={Journal of Political Economy},
  year={2019},
  volume={127},
  pages={2684 - 2734}
}
Uncertainty about future economic and climate conditions substantially affects the choice of policies for managing interactions between the climate and the economy. We develop a framework of dynamic stochastic integration of climate and economy, and show that the social cost of carbon is substantially affected by both economic and climate risks and is a stochastic process with significant variation. We examine a wide but plausible range of values for critical parameters with robust results and… 
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