Climate Change Economics

Topics

• The course will start with a brief review of the science of climate change, discuss scenarios of economic growth and the greenhouse gas emissions caused by economic activities and investigate various emission reduction opportunities and their economic costs. A significant amount of time will be spent on studying the impacts of climate change, their economic evaluation and how adaptation can lower the costs of climate damages. We will then study various theoretical frameworks economists have developed that answer the question how estimates about the costs and benefits of climate policy can be combined to find “good” climate policies. We then study three more specialized topics that turn out to be of great importance when analyzing climate change policy: first, how do we compare costs and benefits of generations that live many centuries apart? Second, how do we design climate policy when our projections of both the costs and the benefits of climate policy are highly uncertain? And third, how can equity considerations be accounted for in an economic assessment of climate change policy? The course will close with a look at international cooperation on climate policy and why it has been so difficult to agree on effective treatises that implement climate change policy.
• Students will be familiar with the tools economists use to analyze climate change policy. They will have studied empirical estimates of the costs and benefits of climate policy and have an understanding of the analytical issues that drive research on the economics of climate change. Students will also have gained insight into the practical aspects of modeling the economics of climate change by building a simple integrated assessment model in a scientific programming language of their choice. They will be able to use that model to do simple analysis of climate change policy themselves.

Official catalogue course objectives and student learning outcomes