{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,10,15]],"date-time":"2026-10-15T19:45:56Z","timestamp":1792093556405,"version":"4.4.0"},"posted":{"date-parts":[[2026]]},"group-title":"SSRN","reference-count":27,"publisher":"Elsevier BV","license":[{"start":{"date-parts":[[2026,1,1]],"date-time":"2026-01-01T00:00:00Z","timestamp":1767225600000},"content-version":"unspecified","delay-in-days":0,"URL":"https:\/\/www.uspto.gov\/ip-policy\/copyright-policy\/copyright-basics"}],"content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":[],"abstract":"<jats:p>We study dynamic portfolio choice when investors learn a latent emissions rate from biased and noisy cumulative reports. The model distinguishes the current physical rate from the amount accumulated over each reporting interval and separates additive bias, multiplicative bias, and measurement noise. An exact Gaussian interval filter supplies the observable state for the control problem. Even a noiseless cumulative report generally leaves uncertainty about the current rate. With independent return and emissions shocks, we establish optimality of a constrained quadratic allocation rule at every finite horizon. With linked shocks, an unconstrained feedback follows from a Riccati system with report-date updates, subject to stated verification conditions. A public-data implementation combines national inventories, an external emissions database, and country exchange traded fund returns. A separate Canada-France stress experiment evaluates reporting misspecification under a common welfare criterion. Starting from a common calibrated prior, with relative risk aversion two, overlooking hypothetical 20% Canadian underreporting at a unit noise-tosignal variance ratio increases the thirty-year mean time-averaged Canadian weight by 5.97 percentage points and simulated carbon exposure by 11.39%. The wealth-equivalent loss is 0.30% for ignored bias, 0.60% for ignored bias and noise jointly, and 2.24% under a severe joint stress. Reporting noise can be costly even when average allocations barely change.<\/jats:p>","DOI":"10.2139\/ssrn.7616698","type":"posted-content","created":{"date-parts":[[2026,10,15]],"date-time":"2026-10-15T18:58:34Z","timestamp":1792090714000},"source":"Crossref","is-referenced-by-count":0,"title":["Dynamic Portfolio Choice under Biased and Noisy Emissions Reports"],"prefix":"10.2139","author":[{"ORCID":"https:\/\/orcid.org\/0000-0001-9691-4322","authenticated-orcid":true,"given":"Marcos","family":"Escobar-Anel","sequence":"first","affiliation":[],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Azin","family":"Sharifi","sequence":"additional","affiliation":[],"role":[{"vocabulary":"crossref","role":"author"}]}],"member":"78","reference":[{"key":"ref1","first-page":"75","volume":"28","author":"Jitendra Aswani","year":"2024","journal-title":"Are carbon emissions associated with stock returns? 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