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preference specs are inconsistent with observed asset valuations. This literature has developed a richer set of preferences that are extra according to asset value habits. The local weather-economy literature by and enormous has not adopted this richer set of preferences. In this paper, we discover the implications of these richer preference specifications for the optimum pricing of carbon emissions. We develop a easy discrete-time model with Epstein-Zin utility by which uncertainty about the impact of carbon emissions on global temperature and on eventual damages is progressively resolved over time. We embed a number of features together with tail risk, the potential for technological change and backstop applied sciences. When coupled with the potential for low- probability, high-influence outcomes, our calibration to historical actual rates of interest and the equity threat premium suggests a excessive value for carbon emissions today which is then anticipated to

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