We develop novel high-frequency indices that measure climate attention across a wide range of developed and emerging economies. By analyzing the text of over 23 million Tweets published by leading national newspapers, we find that a country experiencing more severe climate news shocks tends to see both an inflow of capital and an appreciation of its currency. In addition, brown stocks experience large and persistent negative returns after a global climate news shock if located in highly exposed countries. A risk-sharing model in which investors price climate news shocks and trade consumption and investment goods in global markets rationalizes these findings.

Are carbon emissions priced in equity markets? The literature is split with different approaches yielding conflicting results. We develop a stylized model showing that, if emissions is a priced characteristic in equity markets, stock returns depend on expected emissions and the product of the innovation in emissions and the price-dividend ratio. Building on this insight, we derive and test new predictions. We find that emissions are priced in equity markets, but the magnitude of such pricing depends on how ``super emitters'' (mostly firms operating in electric power generation) are modeled. Our theoretical insight also helps reconcile seemingly divergent results in the literature.

Using detailed policy-level data and natural disasters as our setting, we document that insurers pass on climate risk costs to policyholders through both premiums and claim rejection rates. Premiums increase significantly in both disaster-affected and unaffected areas following disaster events, while rejection rates rise only in unaffected areas. Spillover effects are heterogeneous and depend on consumers' price sensitivity: consistent with price shrouding, less price-sensitive consumers in unaffected areas face higher premiums, while more price-sensitive consumers bear the costs through increased rejection rates. These effects are further shaped by insurers' financial constraints. During constrained periods, insurers raise premiums in both affected and unaffected areas, whereas during unconstrained periods, they primarily increase rejection rates in unaffected areas. Our findings demonstrate that climate risk has contributed to rising premiums over the past two decades and reveal how insurers’ responses redistribute costs and access, impacting homeowners in both high-risk and low-risk areas.