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The approach builds on existing theory incorporating the unpredictable timing of future Black\u2010Swan events alongside price risks that increase in line with global temperature. An alternative specification where climate\u2010change risks are instead linked to atmospheric carbon dioxide levels is also given. The approach offers simplicity, transparency and allows national\u2010level effects to be estimated. In the short term, prices are artificially inflated and volatility artificially deflated as temperatures rise. This is in\u2010line with previous work suggesting carbon\u2010related risks are underpriced by markets. We use our model to estimate stock market exposure to future climate\u2010change risks given future global temperature rises and increases in atmospheric . The potential effects are considerable once global temperatures increases beyond  above preindustrial levels. We find that climate\u2010change risks are priced in by certain G7 stock markets but not in smaller markets. Estimates of stock market losses directly attributable to global temperature rises up to  above preindustrial levels are also\u00a0given.<\/jats:p>","DOI":"10.1111\/risa.70078","type":"journal-article","created":{"date-parts":[[2025,7,11]],"date-time":"2025-07-11T03:05:14Z","timestamp":1752203114000},"page":"3079-3089","update-policy":"https:\/\/doi.org\/10.1002\/crossmark_policy","source":"Crossref","is-referenced-by-count":1,"title":["Projecting stock market impacts of climate change via rational bubble models"],"prefix":"10.1111","volume":"45","author":[{"ORCID":"https:\/\/orcid.org\/0000-0002-2976-0586","authenticated-orcid":false,"given":"John","family":"Fry","sequence":"first","affiliation":[{"name":"Centre for Mathematical Sciences, School of Natural Sciences University of Hull East Yorkshire UK"}],"role":[{"role":"author","vocabulary":"crossref"}]}],"member":"311","published-online":{"date-parts":[[2025,7,10]]},"reference":[{"key":"e_1_2_9_2_1","doi-asserted-by":"publisher","DOI":"10.1016\/j.endeavour.2016.07.002"},{"key":"e_1_2_9_3_1","doi-asserted-by":"publisher","DOI":"10.1007\/s12665-019-8636-y"},{"key":"e_1_2_9_4_1","doi-asserted-by":"publisher","DOI":"10.1093\/ej\/ueae067"},{"key":"e_1_2_9_5_1","doi-asserted-by":"publisher","DOI":"10.1111\/risa.12847"},{"key":"e_1_2_9_6_1","doi-asserted-by":"publisher","DOI":"10.1016\/j.jfineco.2021.05.008"},{"key":"e_1_2_9_7_1","doi-asserted-by":"publisher","DOI":"10.1111\/j.1539-6924.2012.01880.x"},{"key":"e_1_2_9_8_1","doi-asserted-by":"publisher","DOI":"10.1038\/nature15725"},{"key":"e_1_2_9_9_1","doi-asserted-by":"publisher","DOI":"10.1111\/risa.14086"},{"key":"e_1_2_9_10_1","doi-asserted-by":"publisher","DOI":"10.1016\/j.strueco.2023.05.009"},{"key":"e_1_2_9_11_1","doi-asserted-by":"publisher","DOI":"10.1111\/risa.14195"},{"key":"e_1_2_9_12_1","doi-asserted-by":"publisher","DOI":"10.1016\/j.econlet.2015.02.029"},{"key":"e_1_2_9_13_1","doi-asserted-by":"publisher","DOI":"10.1111\/risa.13975"},{"key":"e_1_2_9_14_1","doi-asserted-by":"publisher","DOI":"10.1257\/mac.4.3.66"},{"key":"e_1_2_9_15_1","doi-asserted-by":"publisher","DOI":"10.1111\/1365-2745.13572"},{"key":"e_1_2_9_16_1","doi-asserted-by":"publisher","DOI":"10.1016\/j.jbankfin.2021.106306"},{"key":"e_1_2_9_17_1","doi-asserted-by":"publisher","DOI":"10.1016\/j.eneco.2021.105738"},{"key":"e_1_2_9_18_1","doi-asserted-by":"publisher","DOI":"10.1038\/nclimate2245"},{"key":"e_1_2_9_19_1","doi-asserted-by":"publisher","DOI":"10.1140\/epjb\/e2012-30234-8"},{"key":"e_1_2_9_20_1","doi-asserted-by":"publisher","DOI":"10.1016\/j.econlet.2024.111671"},{"key":"e_1_2_9_21_1","volume-title":"Quantitative methods in finance using R","author":"Fry J. 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