ENVIRONMENTAL AND ENERGY ECONOMICS

Understanding the challenges and solutions to climate change requires an in-depth analysis of the links between the economy and our energy system. Starting with the economic principles of climate change and environmental economics, this course will deepen concepts related to energy systems and their relationship to the economy and climate change. The course will explain what energy systems are, how they work, and how they are shaped by energy, environmental, and climate policies, as well as by the rapid changes in climate conditions we are experiencing. The course falls within the elective courses and allows to acquire the knowledge necessary for a correct understanding, measurement and management of the specific sustainability dimensions of climate change and energy systems. Practical lessons allow direct experimentation of the knowledge and skills proposed during the course (climate-economic modelling, data analysis, regression analysis).

Students will learn how to conduct research on data and sources to analyze energy trends and patterns in relation to economic development and climate change policies. They will acquire the ability to apply their knowledge to study environmental and energy issues. These skills will be acquired through frontal lectures, practical lectures, and group discussions.

Knowledge and understanding
• Understand the relationship between energy, the economy, and the environment
• Acquire a basic energy literacy and understand the energy systems
• Acquire a basic knowledge of the history of environmental and energy policy
• Acquire acquaintance with the application of theoretical and empirical approaches to energy and environmental issues
• Understand the basics dynamics behind energy markets

Ability to apply knowledge and understanding
• Learn to identify reliable sources of knowledge and data sources to develop critical reflections on assigned or chosen topics regarding energy and climate issues
• Learn how perform descriptive analyses with data related to energy, emissions, policies, with R Studio, STATA, GAMS
• Learn how solve and interpret simple economy-environment models in GAMS

Judgment and communication skills
• Develop the ability to formulate a critical vision on environmental and energy issues
• Acquire the ability to explain and communicate why we need energy and environmental policies, their economic and social implications

Microeconomics, Mathematics, Statistics, English B2

Topic 1 – Energy, the economy, and climate change (3 lectures)
Challenge 1: how can we maintain economic growth while reducing energy use?
Brief history of environmental and energy economics. Stylized facts about energy, the environment, and climate change. The energy trilemma and the role of energy policy.
Growth and environment. Decoupling. Energy primer. Understanding emission drivers through the Kaya identity.
Exercise session 1: Hands on the Kaya identity and the Environmental Kuznet Curve (R)

Topic 2 – Natural resource economics (3 lectures)
Challenge 2: how can design sustainable development pathways?
Price setting, price discrimination, rent-seeking, energy market dynamics, price elasticities. Introduction to dynamic models for the efficient and optimal use of natural resources. Policies in a dynamic context and the green paradox. Role and dynamics of energy prices in climate policy and innovation.
Exercise session 2: Optimal use of natural resources and sustainability

Topic 3 – Climate modelling (3 lectures)
Challenge 2: how can design sustainable development pathways?
Introduction to energy-economy and integrated assessment models; 2. Introduction to GAMS; 3. The use of models the IPCC scenarios; the social cost of carbon; European scenarios and energy policies.
Exercise session 3: Climate economic modelling in GAMS

Topic 4 – Economic efficiency, market failures and policy interventions (3 lectures)
Challenge 3: How can we use markets and policies to achieve sustainable development?
Partial and general equilibrium conditions for efficiency. Market failures. Market power and natural monopoly. Economic approaches to market failures. Role of policy instruments. Distributional implications of policy instruments
Exercise session 4: Climate policies

Topic 5 –Energy demand and energy poverty in a changing climate (3 lectures)
Challenge 4: how can we ensure sustainable energy for all while reducing energy use emissions?
1. Introduction to the concept and metrics of energy demand, energy prices, energy poverty; 2. Energy poverty, climate action, and sustainable development; 3. Wrap up of the course and discussion of the lab activities.
Exercise session 5: Climate econometrics

Required reading
Bhattacharyya (2019). Energy Economics. Concepts, Issues, Markets and Governance. ISBN : 978-1-4471-7467-7, Available on Moodle, Chapter 9
Perman (2003), Natural Resource and Environmental Economics, Pearson, Available on Moodle, Chapters 5, 14, 15, 16.
Additional required readings per topic will be availale on Moodle.

Written Exam (individual, closed book, 90 minutes). The written exam consists of 4 questions. Questions will be based on topics discussed during the course and covered in the material on moodle. The answer to each question will be scored between 0 and 8 points.
For each question, the maximum grade (8) can be achieved if the student demonstrates excellent knowledge of the concepts and the topic covered by the question; excellent understanding of the question; excellent ability to summarize/describe data and results from other studies and to develop a critical evaluation of the existing literature; excellent communication writing skills.
A score of 7.5 for each question is achieved when the student demonstrates excellent knowledge of the concepts and the topic covered by the question; excellent understanding of the question; excellent ability to summarize/describe data, results from other studies; good communication writing skills.
A score of 4.5 for each question is achieved when the student demonstrates a good knowledge of the concepts and the topic covered by the question; a good understanding of the question; a fair ability to summarize/describe data, results from other studies; fair communication writing skills.

Frontal lectures, hands-on sessions, team work.

English

Moodle will be the main tool of communication for the course. All students are encouraged to sign in. Academic honesty is an important part of university training.

written

This subject deals with topics related to the macro-area "Climate change and energy" and contributes to the achievement of one or more goals of U. N. Agenda for Sustainable Development