The social discount rate under a stochastic A2 scenario
Moreover, interaction between economic and climate risks further lowers this estimate of the SDR by 0.9%. Surprisingly, the decline of the SDR never starts before 2100. We attribute this to the slow response of the earth's climate to increases in radiative forcing, thus highlighting the critical importance of properly taking into account the long-term dynamics of the climate system for the SDR. Interestingly, a substantial part of the decrease in the SDR under the reactive specification can be attributed to the presence of a term premium in long-run bonds.