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Course 2020-2021 a.y.

20730 - ENERGY POLICY AND SUSTAINABILITY

Department of Social and Political Sciences

Course taught in English

Go to class group/s: 31

GIO (6 credits - II sem. - OP  |  SECS-P/06)
Course Director:
FRANCESCO GULLI'

Classes: 31 (II sem.)
Instructors:
Class 31: FRANCESCO GULLI'


Mission & Content Summary
MISSION

Analyzing how economy interacts with natural environment requires considering two kinds of scarcity: 1) “Upstream scarcity” related to the depletion of natural resources used to produce goods and services; 2) “Downstream scarcity” connected to the natural environment’s capacity of absorbing the residues from economic activity (including carbon emissions). The importance of “upstream scarcity” was perceived already in the early stages of the studies in economics, subsequently finding a theoretical systematization through “the economics of exhaustible resources” and deeply analyzed from the seventies. “Downstream scarcity” drastically emerged more recently when climate change begins to be perceived as the most important environmental problem. To face these kinds of scarcity, it is justified to use the tools of the economic theory. The European Union itself states that: “since economics is about how to deal with scarce resources, it can often be useful when tackling environmental problems”. The core of the debate on this topic is how to make economic development consistent with environment safeguard (“sustainability”). Starting from this debate, the mission of this course is: 1) Explaining the role of public action (energy and environmental policies) in supporting “sustainability”; 2) Describing how these policies should be designed; 3) Highlighting the role of firms and consumers in fostering the transition towards a "low carbon economy".

CONTENT SUMMARY

The course is divided into three parts.

·      The first part focuses on the concept of sustainability distinguishing between environmental economics and ecological economics. The different typologies of sustainability will be described together with the concept of ecological footprint and with a look at the so-called “circular economy”.

·      Then, since the main focus is on climate change, the energy system (responsible of more than 80% of Green House Gases emissions) will be analysed in depth. Firstly great attention will be given to the global organisation of energy supply and to how the different energy markets (crude oil, natural gas, coal, electricity) are structured and work. Secondly (and this is the core of the course) an extensive analysis of energy and environmental policies will be proposed with focus on those aimed at promoting the development of renewable sources of energy (wind, solar. hydro energy, biomass, marine, etc.) without forgetting the public action to promote energy saving.

·      Finally, given its importance in terms of contribution to sustainability, the transportation sector will be analysed with focus on the opportunities provided by sustainable mobility. In particular, this part of the course deals with the paradigm of sustainable mobility with special reference to road transport. After a brief introduction to the basic model of perfect competition with external costs, road pricing schemes and the impact of technological innovations will be discussed in-depthly with focus on empirical applications and case studies.

 

Below the detailed program.

Part I

-Class 1. Introduction: energy, environment and economic theory; “Upstream” and “downstream” scarcities  (instructor: Gullì; lecture notes provided by the instructor).

 

-Class. 2. Environmental economics vs. ecological economics: Different versions of “sustainable development”; Carrying capacity, ecological footprint and Human Development Index (instructor: Gullì; lecture notes provided by the instructor).

 

-Class 3. Economic growth and sustainability: The Kuznets curve (instructor: Gullì; lecture notes provided by the instructor).

 

Part II

-Class. 4. Climate change and global energy supply; Energy markets: crude oil, coal, natural gas, nuclear power, renewables; electricity (instructor: Gullì; lecture notes provided by the instructor).

 

-Class 5. RES (Renewable Energy Sources) technologies: basic technical issues: wind, solar, biomass, hydro, marine, geothermal, etc. (instructor: Gullì; lecture notes provided by the instructor).

 

-Class 6. RES competitiveness: Market parity (instructor: Gullì; lecture notes provided by the instructor).

 

-Class 7. RES supporting policies (1): environmental taxation; carbon markets; Group assignment (instructor: Gullì; lecture notes provided by the instructor).

 

-Class 8. RES supporting policies (2): quota mechanisms; feed-in mechanisms; hybrid mechanisms; Group assignment (instructor: Gullì; lecture notes provided by the instructor).

 

-Class 9. Other formulations of RES competiveness: Grid parity and supply parity. Fully energy supply decentralization based on RES development: Towards a new (“carbon free”) industry paradigm? (instructor: Gullì; lecture notes provided by the instructor).

 

-Class 10. Energy saving and related supporting policies: markets for “white certificates” (instructor: Gullì; lecture notes provided by the instructor).

 

Part III

-Class 11. The sustainable mobility paradigm (instructor: Percoco; De  Palma, R. Lindsey, E. Quinet, R. Vicherman (eds), A Handbook of Transport Economics, Edward Elgar, 2011 (Ch. 14, 15, 16)).

 

-Class 12. The theory of external costs (instructor: Percoco; De  Palma, R. Lindsey, E. Quinet, R. Vicherman (eds), A Handbook of Transport Economics, Edward Elgar, 2011 (Ch. 14, 15, 16)).

 

-Class 13. Estimates of external costs in Europe and in the US (instructor: Percoco; De  Palma, R. Lindsey, E. Quinet, R. Vicherman (eds), A Handbook of Transport Economics, Edward Elgar, 2011 (Ch. 14, 15, 16)).

 

-Class 14. The theory of road pricing (instructor: Percoco; De  Palma, R. Lindsey, E. Quinet, R. Vicherman (eds), A Handbook of Transport Economics, Edward Elgar, 2011 (Ch. 14, 15, 16)).

 

-Class 15. The empirics of road pricing (instructor: Percoco; De  Palma, R. Lindsey, E. Quinet, R. Vicherman (eds), A Handbook of Transport Economics, Edward Elgar, 2011 (Ch. 14, 15, 16)).

 

-Class 16.. Technological innovations and sustainable mobility (instructor: Percoco; De  Palma, R. Lindsey, E. Quinet, R. Vicherman (eds), A Handbook of Transport Economics, Edward Elgar, 2011 (Ch. 14, 15, 16)).


Intended Learning Outcomes (ILO)
KNOWLEDGE AND UNDERSTANDING
At the end of the course student will be able to...

·      Distinguish the different versions of sustainability.

·      Understand how the economic theory can be applied to the environmental problems.

·      Know how energy markets work and their role in the transition towards a “low carbon economy”.

·      Understand the perspectives of green and circular economies.

·      Understand how renewable energies work and their importance for sustainability.

·      Evaluate public policies aimed at promoting the development of renewable energies and energy efficiency.

·      Recognize the role of the transport sector in promoting sustainable development.

·      Evaluate how sustainable mobility can contribute to the transition towards “smart cities”

 

APPLYING KNOWLEDGE AND UNDERSTANDING
At the end of the course student will be able to...

·      Estimate the ecological footprint of an individual, a city, a region, the humanity.

·      Interpret the relationship between sustainability and economic development.

·      Estimate the generation cost of power generation with focus on renewable energies.

·      Identify the degree of competitiveness of renewable energies.

·      Assess the profitability of investments in green technologies.

·      Prepare strategies to operate in energy (mainly electricity) and environmental markets (carbon markets, markets for green and white certificates).

·      Design energy and environmental policies.

·      Simulate how sustainable mobility can be organised and possibly supported.


Teaching methods
DETAILS

·      Case studies: Real cases of investments in renewable technologies will be described and discussed.

·      Group assignments: In class group assignments consisting of exercises and simulations through which the students are induced to take optimal decisions by using the methodologies explained during the course. At the end of the assignment, each group is charged to describe and discuss the related results.

·      Simulations: In class and interactive simulations of a carbon market and tenders for wind power.


Assessment methods
ATTENDING AND NOT ATTENDING STUDENTS

Evaluation (attending)

 

·      In class group assignments (30%): optional

·      Final written exam (70%): “multiple choice” questions plus “open” questions

·      The in class group assignments consist of exercises and simulations through which the students are induced to take optimal decisions by using the methodologies explained during the course. At the end of the assignment, each group is charged to describe and discuss the related results. The assignments are not mandatory. If the students do not carry out them, the final evaluation will be entirely based on the final written exam (weight: 100%).

·      The final written exam includes “multiple choice” questions and “open” questions related to the concepts and arguments described and discussed during the course. It is aimed at checking either the students’ degree of learning or their ability of analytical synthesis.

 

Evauation (non-attending)

·      The evaluation is entirely based on the final written exam. It includes “multiple choice” questions and “open” questions related to the concepts and arguments described and discussed during the course. It is aimed at checking either the students’ degree of learning or their ability of analytical synthesis.


Teaching materials
ATTENDING AND NOT ATTENDING STUDENTS

·      Part I and II (Gullì). Slides and lecture notes distributed by the instructor. Integrative materials: IPCC assessment report (most recent version), synthesis; BP statistical review of world energy (2019). Optional material: T. Tietenberg and L. Lynne (2018), Environmental and natural resource economics”, Routledge (optional).     

·      Pat III (Percoco). De  Palma, R. Lindsey, E. Quinet, R. Vicherman (eds), A Handbook of Transport Economics, Edward Elgar, 2011 (Ch. 14, 15, 16). Further readings will be made available on Blackboard at the beginning of the course.

 

Last change 15/07/2020 13:30