Environmental and Climate Economics

The course will give students a methodological background in environmental and climate change economics, providing insights on (i) the economic theory of market failures and environmental externalities, (ii) policy instruments for climate change management and regulation, (iii) economic modeling tools used to study climate change impacts, mitigation and adaptation policies. The course contributes to achieve the main objectives of the PhD 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.

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 can be used to design and evaluate climate change impacts and policies.

Students are expected to be familiar with undergraduate-level notions of calculus, statistics, micro and macroeconomics. Students without an economic background are encouraged to read through The Core Economy – available at https://core-econ.org/the-economy/book/ .

Topic 1 - Introduction to environmental and climate change economics
Topic 2 - Externalities and market failures
Topic 3 - Policy instruments
Topic 4 – Notions of growth theory
Topic 5 - Integrated Assessment Models
Topic 6 – Empirical climate economics: impacts and adaptaion (if time allows)

1. Perman R., Ma Y., McGilvray J. and Common M., (2003), Natural Resource and Environmental Economics, Pearson (3rd Edition) - Chapters 5, 14, 15, 16 [PER2003]
2. Filippini & Srinivasan (2024) An Introduction to Energy Economics and Policy [FA2024]
3. Sterner Thomas (2003). Policy instruments for environmental and natural resource management, RFF, Chapters 6-11
4. Handbook of the Economics of Climate Change
Chapter 1 - Introduction to integrated assessment modeling of climate change
Chapter 2 - Empirical approaches to climate change impact quantification (if time allows)
Chapter 3 – Discounting
Chapter 4 - Adaptation to climate change (if time allows)
5. Dellink, R (2004). GAMS for environmental-economic modeling, Wageningen University. Available from the instructor. This is the main reference for learning GAMS [DellinkGAMS]
6. [For students without an economic background – undergraduate level] The Core Economy – Available at https://core-econ.org/the-economy/book/ . Chapters 4, 12, 20 [The Core]

Journal articles will be presented in 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 in moodle.
Assignments and activities are NOT scored but doing them ensures success in the final exam.

written

The instructor is responsible for ensuring the authenticity and originality of all examinations and coursework. In cases of suspected academic misconduct, an additional on-site assessment may be required during the exams, which may differ from the standard format.

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.

Lectures, discussions, and hands-on sessions.

Attendance is required. Regular preparation is also required. The assignments are set out above in the course syllabus. 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.

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