Abstract: This paper evaluates the impact of extreme weather events for the social cost of climate change. To that end we develop a dynamic spatial model of the US economy divided in over 3,000 counties that features risk-averse individuals, forward-looking migration and investment, and idiosyncratic and aggregate climate risk. We achieve tractability by relying on recent methodological advances that leverage analytic perturbations of the Master Equation representation of the economy. We estimate the model on US counties by combining climatic county-level data for weather events such as heat waves, floods and hurricanes over the course of the 20th century with population, migration, investment and income data. We run event studies that trace out the impact of extreme weather events on productivity, amenities, mortality, and capital depreciation. Our findings are twofold. First, climate impacts on capital depreciation and mobility are the main source of climate damages. They substantially magnify the costs of climate change in the business-as-usual warming scenario. Second, adaptation through migration and investment are crucial mitigators of climate damages, without which welfare losses would be much more spatially concentrated.