Environmental and Climate Economics

The course will provide students with 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, and (iii) modeling tools (integrated assessment models) that can be used to evaluate and design climate change policies.
The course contributes to the achievement of the main objectives of the PhD and Master Program 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 expected to have a good understanding of how economic methods and modeling tools can be used to design and evaluate climate change policies.

Knowledge and understanding
• Acquire a basic knowledge of environmental and climate change economics
• Acquire acquaintance with the application of theoretical and empirical approaches to environmental and climate policy issues
• Understand the basics dynamics of integrated assessment models

Ability to apply knowledge and understanding
• Learn to identify reliable sources of knowledge and data sources to develop critical reflections on topics regarding climate change
• 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 climate change issues
• Acquire the ability to explain and communicate why we need climate policies, their economic and social implications

Mathematics, statistics, English B2

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?
 
Topic 1 - Introduction to environmental and climate change economics (Lectures 1-5)
Topic 2 - Externalities and market failures, efficiency, optimality (Lectures 6-7)
Topic 3- Policy instruments (Lectures 8-10)
Topic 4 - Integrated Assessment Models (Lectures 10-13)

Perman R., Ma Y., McGilvray J. and Common M., (2003), Natural Resource and Environmental Economics, Pearson (3rd Edition)
Scientific articles listed in the detailed syllabus available on moodle.

Written Exam (individual, closed book, 90 minutes). The written exam consists of 3 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 10 points.
For each question, the maximum grade (10) 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 7-9 for each question is achieved when the student demonstrates very good knowledge of the concepts and the topic covered by the question; very good understanding of the question; a very good ability to summarize/describe data, results from other studies; good communication writing skills.
A score of 6 for each question is achieved when the student demonstrates a good knowledge of the concepts and the topic covered by the question and a fair ability to summarize/describe data, results from other studies, fair communication writing skills.
Insufficient: patchy/incomplete knowledge of the concepts and subject matter of the question; fair understanding of the question; insufficient ability to summarize evidence from the literature.
Problem sets are optional, but completing them will ensure that you practice with the exercises you will find in the final exam.

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. 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. Plagiarism can cause expulsion from the program. While students may discuss assignments with their classmates and others, they are expected to make sure any written material they submit is their own work. Students are expected to know how to cite the work of others and present a bibliography of the research texts that were used.

written and oral