Estimating the benefits of adaptation to extreme climate events, focusing on nonmarket damages

This paper provides a first approach on how to evaluate nonmarket damages from extreme climate events in monetary units by applying a Computable General Equilibrium (CGE) approach. We develop a static CGE model, which zooms into one single period of a standard Auerbach-Kotlikoff model. While we observe private and instantaneous adaptation in reaction to price changes, we explicitly model public adaptation funded by taxing either labor or...