I study climate uncertainties and their economic impacts. In the first chapter, we discuss the limitations and alternatives to the standard criteria for intertemporal social choice. While these criteria are well-suited for standard risks, their use should be reconsidered in the presence of irreversible regime-shift risks, such as climate tipping points, where the aggregate risk to the welfare of present and future generations is significant. Indeed, these models assume that the planner is risk-neutral regarding this aggregate risk. In contrast, we show that introducing risk aversion over time significantly increases the social cost of carbon (SCC) in the presence of irreversible catastrophic tipping-point risks. In the second chapter, we decompose the climate module of economic models to analyze and quantify how the dynamic interactions between global climate risk and climate subsystems affect global climate policy and the regional management of these subsystems. We apply our theoretical framework to the controversial fate of the Amazon rainforest. Our approach yields two key methodological insights. First, the SCC should include the impact that a marginal increase in cumulative global emissions has on the dynamics of the Amazon rain-forest. This includes scaling current policies to account for carbon emissions from the Amazon under a changing climate, as well as an insurance channel—the “Amazonian beta”—as the social value of carbon emissions varies according to the states of the world in which they occur. Second, the social value of the Amazon rainforest as a carbon stock cannot be reduced to the quantity of carbon it contains; the social cost of the dynamic system is also crucial, that is, the cost of a marginal decline in the state of the subsys-tem that reduces its capacity to persist. In the third chapter, we quantify the extent to which the spatial and temporal aggregation of temperature data in climate impact projections might obscure scientific uncertainties between climate projections and underestimate future climate damages. In the fourth chapter, I quantify the impact of biophysical channels (albedo, evapotranspiration, roughness) on the distribution and aggregate impacts of climate change on welfare along the Shared Concentration Pathway SSP2-4.5 at a global scale and at 1° resolution. These channels are endogenous to regional economic activities due to land-use changes from agriculture and urbanization, and they interact with adaptation strategies such as migration or structural change. Thus, my dissertation follows three directions: documenting the economic consequences of climate uncertainties, contributing methodologically to the study of uncertainty at the interface of human and natural systems, and enriching the literature on intertemporal normative social choice through numerical models used for quantification.
