Macroeconomics of Climate Change

12.

Uncertainty, Risk, and Decision-Making

12.1.

Types of Uncertainty in Climate Economics

12.1.1.

Parameter Uncertainty

12.1.2.

Model Uncertainty

12.1.3.

Deep Uncertainty and Ambiguity

12.2.

Decision-Making Under Uncertainty

12.2.1.

Expected Utility Theory

12.2.2.

Robust Decision-Making

12.2.3.

Real Options Approaches

12.3.

Risk Management and Precautionary Principles

12.3.1.

Insurance and Risk Transfer

12.3.2.

Diversification Strategies

12.3.3.

Adaptive Management

12.4.

Fat-Tail Risks and Catastrophic Outcomes

12.4.1.

Low-Probability, High-Impact Events

12.4.2.

Tail Risk and Insurance

12.4.3.

Existential Risk Considerations

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11. Behavioral Economics and Climate Policy

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1. Introduction to Climate-Economy Linkages