| Summary: | Abstract Climate feedback mechanisms that have the potential to intensify global warming have been omitted almost completely in the integrated assessment of climate change and the economy so far. In the present paper, we incorporate the permafrost carbon feedback (PCF) into the well-known integrated assessment model DICE-2013R. We calibrate the parameters for our extended version of DICE-2013R and compute the optimal emission mitigation rates that maximize welfare. Our results indicate that accounting for the PCF leads to an increase in mitigation. Finally, we quantify the economic losses resulting from a climate policy which ignores the impacts of the PCF. Integrated assessment, DICE model, Climate feedbacks, Permafrost
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