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Course 2021-2022 a.y.

30387 - CLIMATE CHANGE ECONOMICS

Department of Economics

Course taught in English

Go to class group/s: 31

BIEF (6 credits - I sem. - OP  |  SECS-P/01)
Course Director:
VALENTINA BOSETTI

Classes: 31 (I sem.)
Instructors:
Class 31: VALENTINA BOSETTI


Suggested background knowledge

Students are expected to be comfortable with econometrics and microeconomics to feel at ease with this course.


Mission & Content Summary
MISSION

Climate change is by and large an economic problem. It is a global, inter-temporal externality and it represents a major challenge for economists. This Course (also an Engage Course within the CIVICA Bachelor Engage Track developed within the framework of the CIVICA Alliance) examines the key role of economic activities as a driver of climate change and how economic tools can be used to investigate this problem and to design climate policies. In order to deal with the problem of climate change the students have to rethink some key economic concepts like efficiency, externality, inter-temporal decision making under uncertainty and welfare aggregation, from a new and more applied perspective. The students also familiarize with key tools for climate change and long term energy policy making: integrated assessment models. The general mechanism of these tools are learned through applications like the role of innovation in the energy sector, game theory and the (in)stability of international climate agreements, and how the inclusion of uncertainty affects optimal policies and investment decisions.

CONTENT SUMMARY

 

  • Introduction to the Climate Change challenge
  • Integrated Assessment Models
  • Making Decisions about the Environment (Cost Benefit and Cost Effective Analysis)
  • Who is the social planner? (Inter-temporal and social aggregation issues)
  • Modeling Technological Change and Climate Mitigation technologies
  • Valuation Methods (Valuing the Market and non-Market Benefits of avoided Climate Change)
  • Environmental Policy Making
  • International Environmental Agreements

Intended Learning Outcomes (ILO)
KNOWLEDGE AND UNDERSTANDING
At the end of the course student will be able to...
  • Understand the basic dynamics of our Planet's climate system
  • Understand the main economic implications of climate change
  • Understand the role of economic processes in causing GHG emissions and the role of technologies in mitigating this effect
  • Understand what a global stock externality is
  • Critically discuss the role of Cost Benefit Analysis in the context of climate change
  • Understand what an Integrated Assessment Model is
  • Understand the current status of International Climate Negotiations
  • Understand market-based policies for externalities
APPLYING KNOWLEDGE AND UNDERSTANDING
At the end of the course student will be able to...
  • Understand the implications of climate policies for business and governments
  • Work in a climate change office of a big firm
  • Fight for a better Planet on the solid grounds of scientific knowledge
  • Make everyday decisions knowing what they imply in terms of GHG emissions

Teaching methods
  • Face-to-face lectures
  • Online lectures
  • Exercises (exercises, database, software etc.)
  • Case studies /Incidents (traditional, online)
  • Group assignments
  • Interactive class activities (role playing, business game, simulation, online forum, instant polls)
DETAILS
  • The course will take place in the classroom and online (the precise lecture calendar will be provided on September 1st in the detailed syllabus)
  • Online lectures will be Asynchronous depending on the topic
  • Asynchronous information will be followed by short tests (not graded) to check status of understanding and follow up discussion and feedback 
  • In class lectures will include gamification and experiments
  • Role Playing during Classroom lectures includes: Climate Agreement Negotiations, Mitigation Portfolio Strategies
  • Group Assignment 1*: Written Policy Memo, followed by a presentation to the class and teacher
  • Group Assignment 2*: Creation of a 1 Minute video (the most voted ones are shown in class)

 

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


Assessment methods
  Continuous assessment Partial exams General exam
  • Written individual exam (traditional/online)
  •     x
  • Group assignment (report, exercise, presentation, project work etc.)
  •     x
  • Active class participation (virtual, attendance)
  •     x
  • Peer evaluation
  •     x
    ATTENDING STUDENTS

    The preparation of a written memo will cover one of the key and timely topics related to the economic side of the climate change problem. The presentation of the memo to the class will help students improve their communication skills and face questions from an audience. The preparation of a short video will help the student to improve her/his communications abilities and to deepen their understanding of the topic through the simplification that a short video preparation requires.

     

    The written exam is divided into two sections. The first set of questions requires very short answers and ensures that the student is familiar with the basic definitions and concepts related to climate change, its economic impacts and the policies that might help us deal with it. The second set of questions requires longer answers and allows the student to elaborate on connections that are visible at a deeper level of understanding of the topic.

     

    * Note: Two Assignments, a Short Final Exam and a minimum attendance rate are Compulsory for Attending students and those taking this course within the CIVICA Bachelor Engage Track Programme:

    1. Assignment 1* (Short Memo): 40% of the Final Grade.
    2. Assignment 2 * (Video): 30% of the Final Grade.
    3. Required Final exam* (Short version with respect to non attending students): 30% of the Final Grade.
    4. Class Active Participation Prize (1 point) to the top 5 Students.
    • What does it mean to be an Attending Student ? 75% overall presence between live/online classes and the submission of online tests following online classes (*attendance requirements also apply to CIVICA track students).
    • Assignment 1 Written Memo: You and your group will work on a brief written policy memo (topic is previously approved by the Course Instructor) which will be presented in the last few days of class. Active participation during other teams’ presentations is compulsory.
    • Assignment 2 Video: You and your group will produce a one/two minute video explaining a key concept (topic is previously approved by the Course Instructor) covered during the course. You constructively comment and vote videos done by other teams using BBoard. A prize will be assigned to the best video.
    • The Final Short Exam is written and compulsory for Attending Students and CIVICA Bachelor Engage Track Students. It is required to have a minimum of 18/30 in the final written exam to pass the Course.

    • If you Start the Course as an Attending Student, you have to stick to that option throughout the Academic Year.

    • All above requirements expire within the Academic year. 

    NOT ATTENDING STUDENTS

    The written exam is divided into two sections. The first set of questions requires very short answers and ensures that the student is familiar with the basic definitions and concepts related to climate change, its economic impacts and the policies that might help us deal with it. The second set of questions requires longer answers and allows the student to elaborate on connections that are visible at a deeper level of understanding of the topic.

     

    Final exam (Long Version): 100% of the Final Grade

    • The Final Exam is written.
    • It is required to have a minimum of 18/30 in the final written exam to pass the Course.
    • Note that if you choose this type of exam you are still welcome to attend all classes!

    Teaching materials
    ATTENDING AND NOT ATTENDING STUDENTS

    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/.
    Last change 19/07/2021 16:03