CGE and Integrated Assessment Modelling of CC Impacts and Policies

The course aims to introduce students to the main methodological challenges that CGE, and, more in general, Integrated Assessment (IA) modelling face when an economic assesment of climate change impacts and policy (mitigation or adaptation) has to be performed. It will present the modelling solutions adopted to tackle the challenges and discuss their implications. Finally, the course will critically revise the main results produced by this quantitative literature including its most recent contributions. The teachings will be complemented by an applied/practical part demonstrating how Computable General Equilibrium modelling can be constructed first, and applied then, to the study of the climate change issue.

At the end of the course students will acquire a good basic knowledge of: the challenges inplicit in the econonomic assessments of climate change (such us uncertainty treatment, horizontal and vertical equity, non market evaluation), the main modelling/quantitative approaches that are applicable for this purpose (being aware of respective strengths, weaknesses, more appropriate field of applicability) with a particular focus on computable general equilibrium modelling; their results and their interpretation. Students will be also capable to understand and develop simple practical assessments based on computable general equilibrium modelling.

There are no pre-requisites, However, a basic knowledge of micro and international trade economics, environmental economics will help the understanding of several issues discussed during classes.

- The challenges to the economic assessment of climate change (impacts and policies):
- Uncertainty
- intertemporal dimension (discounting),
- Interpersonal aggregation (equity weighting and welfare functions),
- non-market values,
- modelling implications
- Quantitative approaches to the economic assessment of climate change: econometrics, models (Integrated assessment models, types, methods, applicability, a focus on computable general equilibrium models), semi-quantitative methods.
- Results from the economic modelling literature
- Modelling adaptation
- A practical example: a computable general equilibrium assessment
- Applying CGE models to climate change impacts and policies: selected practical examples

Lecture slides will be made available by the professor.
Some useful texts are:
Climate Economics, RSJ Tol, Edward Elgar
and
Natural Resource and Environmental Economics, Perman, Ma, Mc Glilvray, Common (3rd 4th edition) Pearson, just chapter 9 (economy-wide modeling)

For the "non applied" part, a presentation (to the professor and colleagues) of a paper (or group of papers) connected to the topics discussed during the lectures. The reading material will be made available by the professor. For the applied part a simple practical exercise on the methods developed during classes.

Front lectures on the theorethical aspects supported by some practical exemplifications on computable general equilibrium modelling.

English

written and oral