Course 2026-2027 a.y.

The course is structured around three main blocks, moving from the foundations of climate change to policy design.

The first part introduces the climate challenge from an economic perspective. It covers the scientific and empirical basis of climate change, including the sources and distribution of greenhouse gas emissions, and the key features of the energy system and the energy transition.

The second part focuses on economic analysis. It examines climate damages, mitigation options, and technological change, and introduces the main tools used to evaluate environmental decisions, including cost-benefit and cost-effectiveness analysis. It also addresses core conceptual issues such as intertemporal choice, social aggregation, and the role of the social planner. Students are introduced to integrated assessment models and the concept of the social cost of carbon, as well as valuation methods for market and non-market impacts.

The third part turns to policy. It analyzes environmental policy instruments, the design and evaluation of climate policies, and the challenges of international environmental agreements and collective action.

Students will acquire:

• Knowledge of the basic dynamics of the climate system and the main drivers of greenhouse gas emissions.
• Understanding of the economic implications of climate change, including its nature as a global stock externality.
• Understanding of the role of economic activity in generating emissions and of technological change in mitigation.
• Familiarity with the main tools used to analyze environmental decisions, including cost-benefit and cost-effectiveness analysis.
• Understanding of the structure and role of Integrated Assessment Models and the concept of the social cost of carbon.
• Knowledge of the main market-based policy instruments for addressing externalities.
• Understanding of the current state and key challenges of international climate negotiations.

Students will also develop the ability to critically assess the application of economic tools, particularly cost-benefit analysis, in the context of climate change.

At the end of the course, students will be able to:

• Analyze the economic drivers of greenhouse gas emissions and evaluate the effectiveness of alternative mitigation strategies.
• Apply cost-benefit and cost-effectiveness frameworks to assess environmental policies and investment decisions.
• Interpret outputs from integrated assessment models and use them to inform policy and strategic choices.
• Evaluate climate policy instruments (e.g. carbon pricing, regulation, subsidies) in terms of efficiency, distributional impacts, and feasibility.
• Assess the implications of climate policies for firms, governments, and international actors.
• Analyze the structure and dynamics of international climate negotiations and identify key constraints to cooperation.
• Formulate and communicate policy recommendations clearly and in a structured manner, both in writing and orally.
• Work effectively in teams to address complex, multidisciplinary problems related to climate change.
• Incorporate climate-related considerations into decision-making in professional and everyday contexts.

• Lectures
• Practical Exercises
• Collaborative Works / Assignments
• Interaction/Gamification

The course combines in-person and online components (the detailed lecture calendar will be provided on September 1st).

Asynchronous online content is complemented by short, non-graded tests to monitor understanding and prepare in-class discussion.

In-class sessions follow an interaction-based format, with a strong emphasis on application.

Lectures are structured around short blocks of explanation combined with group work, guided exercises, polls, debates, and experiments.

Role-playing activities include climate agreement negotiations and mitigation portfolio strategies, allowing students to apply economic reasoning in strategic and policy contexts.

Assignments

Group Assignment 1*: Policy Memo
Students produce a policy memo grounded in academic and policy evidence. The assignment is designed to develop analytical and critical skills, including the ability to evaluate and improve upon AI-generated content and to justify policy recommendations under uncertainty. The memo is presented and discussed in class.

Group Assignment 2*: Short Video (1 minute)
Students create a short video communicating a policy issue. The assignment focuses on framing and strategic communication: students are asked to construct a message from a specific perspective, while peers critically assess the underlying assumptions, simplifications, and potential biases.

Videos are shown and discussed in class.

* Required for Attending Students and CIVICA Bachelor Engage Track Programme Students

To qualify as an Attending Student, students must attend at least 75% of all classes (including asynchronous components), complete all mandatory online tests on time, and actively participate in group work and in-class activities.

Assessment is based on two group assignments (60% of the final grade) and individual written exam(s) (40%). A minimum score of 18/30 in the written exam(s) is required to pass the course.

• Assignment 1 – Policy Memo (30%)

  Students work in groups to prepare a short policy memo and present it in class.

  The written memo is evaluated on clarity, structure, use of evidence, and consistency of the policy recommendation. The in-class presentation and discussion (oral defense) assess students’ ability to justify their arguments, respond to questions, and critically engage with alternative viewpoints.

  Particular emphasis is placed on the oral defense, as it provides a direct test of students’ understanding, their ability to reason under scrutiny, and their capacity to distinguish their own analysis from AI-generated content.

• Assignment 2 – One-Minute Video (30%)

  Students work in groups to produce a short video explaining a policy issue or concept from a specific perspective.

  The assignment focuses on strategic communication and framing. Each group is assigned a perspective (not disclosed to the class) and is required to construct a coherent narrative consistent with that perspective. Videos are viewed and evaluated by peers, who are asked to infer the underlying position and assess the clarity and consistency of the message.

• Written Exam(s) – Mid-Term + Final or General Final (40%)Students are assessed individually on their understanding of the course material, including key concepts, analytical frameworks, and policy tools. The exam structure ensures both knowledge of core content and the ability to articulate and connect economic arguments.
• Bonus Point

  Students may earn additional points as follows:

• +1 point for completing all mandatory asynchronous content and tests on time.
• +1 point (video assignment) based on the alignment between intended and perceived message:
  • groups are rewarded if their assigned perspective is correctly identified by a meaningful but not excessive share of the class (i.e. neither too low nor too high recognition rates),
  • students who correctly infer the underlying perspective of other groups’ videos are also rewarded.

• These incentives are designed to encourage consistent engagement and careful construction and interpretation of policy narratives.

Not Attending Students take the final written general exam.

Main Book: 

• C. KOLSTAD, Intermediate Environmental Economics: International Edition, OUP Catalogue, Oxford University Press, 2011, 2nd edition, number 9780199732654.

The Bboard online syllabus contains all the hyperlinks to the material below:

• W. NORDHAUS, Why the Global Warming Skeptics Are Wrong, The New York Review of Books from the March 22, 2012 issue.
• R.A. MULLER, The Conversion of a Climate-Change Skeptic, The New York Times, Published: July 28, 2012.
• http://www.nationalgeographic.com/climate-change/special-issue/
• http://www.rollingstone.com/topic/climate-change
• J. HANSEN, L. NAZARENKO, R. RUEDY, et al., Earth's Energy Imbalance: Confirmation and Implications, 2005, Science  308, 14.
• IPCC 5th Assessment Report. Technical Summary, Working Group 1 (If the link does not work go to http://www.climatechange2013.org/ and click on the summary for policy makers) http://news.stanford.edu/news/2015/september/global-warming-hiatus-091715.html.
• IPCC 5th Assessment Report. Summary for Policy Maker, Working Group 3 (If the link does not work go to http://mitigation2014.org/ and click on the summary for policy makers) http://coolclimate.berkeley.edu/carboncalculator.
• IEA, Energy, Climate Change and the Environment.
• D. FULLERTON, R. STAVINS, How Economists See the Environment, Nature, 395:6701, 1998.
• G. HARDIN, The Tragedy of the Commons, Science, 162:1243-48, 1968.
• S.J. DUBNER, S.D. LEVITT, Freakonomics: Not-So-Free Ride, The New York Times Published: April 20, 2008.
• KAHNEMAN, et al., Experimental Test of the Endowment effect and the Coase Theorem, The Journal of Political economy, 1990.
• IPCC 4th AR Climate Change 2007: Working Group III: Mitigation of Climate Change, (Chapters 2.4 and 2.6).
• NORDHAUS, Economic aspects of global warming in a post- Copenhagen environment, PNAS, 2010.
• T. SCHELLING, Intergenerational discounting, Energy Policy 23, 395-401, 1995.
• STEFRI KELMAN, Cost-Benefit Analysis: An Ethical Critique, from AEI Journal on Government and Society Regulation (1981) PP. 33-40.
• A.P. KIRMAN, Whom or What Does the Representative Individual Represent?, Journal of Economic Perspectives, American Economic Association, vol. 6(2), pages 117-36, Spring, 1992.
• P. KRUGMAN, Building a Green Economy, The New York Times, April 7, 2010.
• R.S.J. TOL, The Damage Costs of Climate Change Toward More Comprehensive Calculations, Environmental and Resource Economics 5, 353-374, 1995.
• Discussion of Burke, Hsiang, and Miguel, 2015. 
• N. STERN, The economics of climate change – The Stern Review, Cambridge University Press, Cambridge, 2007.
• L. CLARKE, et al., International climate policy architectures: Overview of the EMF 22 International Scenarios, Energy Economics, pagg.S64–S81, 2009.
• S. PACALA, R. SOCOLOW, Stabilization Wedges: Solving the Climate Problem for the Next 50 Years with Current Technologies, Science, 2004. http://cmi.princeton.edu/wedges/.
• W.D. NORHAUS, Integrated Economic and Climate Modeling, Cowles Foundation Discussion Paper No. 1839, December 9, 2011.
• P. KRUGMAN, Building a Green Economy, The New York Times, April 7, 2010.
• J. CHAFFIN, Emissions trading: Cheap and dirty, Financial Times, http://www.robertstavinsblog.org/
• S. BARRETT, Self-Enforcing International Environmental Agreements, Oxford Economic Papers, Vol. 46, pp. 878-894, 1994,  https://www.climateinteractive.org/programs/world-climate/.