Environmental and Climate Economics

The course will give students a methodological background in environmental and climate change economics, focusing on (i) the economic theory of market failures and environmental externalities, (ii) policy instruments for climate change management iii) modelling tools (integrated assessment models) that can be used to evaluate and design climate policies.
The course contributes to achieve the main objectives of the PhD and master Programme in Science and Management of Climate Change. It will teach students to: understand, synthesize and communicate the problem of climate change as an economic problem; understand and apply different economic methods to analyze and design innovative climate policy solutions for mitigation and adaptation.

Students are expected to understand, synthesize and communicate the economic nature of the climate change problem. They are expect to have a good understanding of how economic methods and modelling tools can be used to design and evaluate climate change policies.

Undergraduate-level notions of calculus.

Why do we need environmental and climate change policies?
Welfare economics and basic concepts. Focus on: externalities, market failures, public goods, notions of game theory, growth and the environment.
Policy instrument design, overlapping regulations, environmental policy and innovation, the political economy of energy innovation.
How can we decide about the implementation of climate change policies?
Economy-wide modelling tools. How can we use modelling tools to evaluate and design mitigation and adaptation policies?
 

Perman R., Ma Y., McGilvray J. and Common M., (2003), Natural Resource and Environmental Economics, Pearson (3rd Edition)
The Core Economy – Available at https://core-econ.org/the-economy/book/ . This textbook is more suitable for students without an economic background
Scientific articles listed in the detailed syllabus available in moodle.

During the course students will be asked to participate to in-class activities (exercises and discussions) and to deliver assignments. In-class activities and assignments will count 20%
for the final grade. The final exam will contribute to the remainder 80% of the final grade. The in-class activities and assignments and final project are meant to evaluate students’ ability to 1) understand the economic principles
applied to climate change, 2) understand the implementation of climate policies, 3) analyze the impacts of climate policies, 4) understand how IAMs operate and their results.

Each lecture will combine a frontal lecture and in-class activities (hands-on sessions, students’ presentations). Activities and assignments will allow students to become familiar with the methods and tools introduced in the course and to use the concepts, methods and tools in the analysis of climate change policies – their implementation and assessment. Activities will include hand-on sessions on the software GAMS, R, relevant databases, as well as group discussions. Presentations will give students the possibility to strengthen their communication skills.

English

Further details about readings, in-class activities, assignments, and the final project will be communicated at the beginning of the course and published in moodle. Two/three additional guest lectures will be given by experts in the field.

written and oral