ENVIRONMENTAL AND CLIMATE ECONOMICS

This course introduces the basic concepts of environmental economics for students whose background is mostly in environmental sciences. This is particularly important for the program on Global Change and Sustainability because students need to know both the physical and the economic implications of climate change and other environmental problems. Therefore, starting from a basic knowledge of the main elements of microeconomics, this course analyses the economic dimension of several environmental issues, with a focus on climate change, and the policy instruments to address them. Theoretical analyses and mathematical tools will be used jointly with applications to the major environmental problems that human societies are facing. Policy tools such as green taxes, emission permits and subsidies will be presented and assessed with the aim to enable students to design an environmental fiscal reform. This course will also analyse cost-effective environmental policies and their implementation in specific cases. It will focus in particular on the most important of today environmental problems: climate change. It will analyse its causes, main consequences and the policies to be implemented. The course will also provide students with tools to analyse the current state of negotiations on climate change control. It will identify the drivers and features of possible international agreements and will present scenarios of future development of international climate negotiations.

1. Knowledge and understanding:
1.1 Understand the role of environmental economics, why it's important to properly consider the economic dimension of environmental studies
1.2. Understand why public intervention is required to correct environmental externalities
1.3. Compare different environmental policy instruments
1.3 Assess the role of policy instruments in international environmental negotiations

2. Ability to apply knowledge and understanding:
2.1. Use theoretical models and economic tools to address environmental problems
2.2. Apply economic instruments to analyse and mitigate climate change
2.3. Identify solutions to reduce obstacles towards international environmental agreements

3. Judgment skills:
3.1. Assess pros and cons of different environmental policy instruments
3.2. Understand the future of energy systems
3.3. Evaluate the success probability of international negotiations

Basic knowledge of economics, mathematics and statistics. Students should also be familiar with the most important environmental problems and should follow the debate on the measures and policies to address climate change by reading, for example, the latest IPCC reports before starting the course.

1. Market inefficiency to address environmental externalities
2. Environmental regulation and policy
3. The role of green taxes
4. Permit markets
5. A comparison of taxes vs permits
6. Environmental tax reforms
7. Guidelines and criteria to design an environmental tax reform
8. The EU ETS
9. Climate change: main drivers
10. Climate change: impacts and policies
11. The history of climate agreements: from Rio to Paris
12. The theory of international environmental agreements
13. Application to climate agreements
14. Innovation for climate change control
15. Finance and investments

R. Perman, Y.Ma, M. Common, D. Maddison, J. McGilvray, Natural Resource and Environmental Economics, 4th edition, Pearson 2011,
J.M.Harris, B. Roach, Environmental and Natural Resource Economics, Third Edition, M.E.Sharpe, 2013.
Stephen Smith, Environmental Economics: A Very Short Introduction, Oxford University Press, 2011
Charles Kolstad, Environmental Economics, Oxford University Press, 2010
OECD, Environmental Fiscal Reform. Progress, Prospects and Pitfalls, 2017
Richard S.J. Tol, Climate Economics. Economic Analysis of Climate, Climate Change and Climate Policy, Edward Elgar, 2023
Miria A. Pigato, Fiscal Policies for Development and Climate Action, The World Bank Group, 2019
William Nordhaus, The Climate Casino, Yale University Press, 2013.
Steven D. Levitt e Stephen J. Dubner , Freakonomics, Harper&Collins, 2009
Sixth IPCC Assessment Report (the summary for policymakers and the synthesis report at least)

Students may pass the exam by writing a few essays/assignments during the lecture period. Students will be asked to write 2 or 3 essays on different topics, linked to what discussed and taught in lectures or as a way to apply and deepen the contents of the lectures. They will also be asked to use a simple model to simulate different emission reduction strategies. Finally, students will work on an innovation/startup project designed to address the causes or consequences of climate change. These activities will be assessed and replace the final exam.

written and oral

The lecturer has a duty to ensure that the rules regarding the authenticity and originality of exam tests and papers are respected. Therefore, if there is suspicion of irregular conduct, an additional assessment may be conducted, which could differ from the original exam description.

A. scores in the 18-22 range will be awarded in the presence of:
- sufficient knowledge and ability to understand applied in reference to the program;
- limited ability to collect and/or interpret data, formulating independent judgments;
- sufficient communication skills, especially in relation to the use of specific language that pertains to the
economic functioning of public services;
B. scores in the 23-26 range will be awarded in the presence of:
- fair knowledge and ability to understand applied in reference to the program;
- fair ability to collect and/or interpret data, formulating independent judgments;
- fair communication skills, especially in relation to the use of specific language that pertains to the
economic functioning of public services;
C. scores in the 27-30 range will be awarded in the presence of:
- good or excellent knowledge and ability to understand applied in reference to the program;
- good or excellent ability to collect and/or interpret data, formulating independent judgments;
- fully appropriate communication skills, especially in relation to the use of specific language that
pertains to the economic functioning of public services.
D. honors will be awarded in the presence of knowledge and understanding applied in reference to the
program, judgment and communication skills, excellent.

Lectures and workgroups . Students will be asked to prepare short essays that may be discussed in class. Much of the learning process should take place before and during the course, to make lectures more participated and interesting, and to give students the capacity to use and apply the acquired knowledge.

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