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Course 2020-2021 a.y.


Department of Economics

Course taught in English

Go to class group/s: 31

CLEAM (6 credits - I sem. - OP  |  SECS-P/01) - CLEF (6 credits - I sem. - OP  |  SECS-P/01) - CLEACC (6 credits - I sem. - OP  |  SECS-P/01) - BESS-CLES (6 credits - I sem. - OP  |  SECS-P/01) - WBB (6 credits - I sem. - OP  |  SECS-P/01) - BIEF (6 credits - I sem. - OP  |  SECS-P/01) - BIEM (6 credits - I sem. - OP  |  SECS-P/01) - BIG (6 credits - I sem. - OP  |  SECS-P/01) - BEMACS (6 credits - I sem. - OP  |  SECS-P/01)
Course Director:

Classes: 31 (I sem.)

Suggested background knowledge

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

Mission & Content Summary

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 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.

  • 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)
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 GHGs emissions and the role of technolgoies 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 is an Integrated Assessment Model.
  • Understand the current status of International Climate Negotiations.
  • Understand what are market-based policies for externalities.
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.
  • Take everyday's decisions knowing what they imply in terms of GHG emissions.

Teaching methods
  • 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)
  • The course is entirely offered online.
  • Online lecture will be either Synchronous (recorded) and Asynchronous (check the schedule) 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. 
  • Synchronous Sessions will include gamification and experiments.
  • Role Playing Synchronous Sessions include: Climate Agreement Negotiation, Mitigation Portfolio Strategy.
  • Group Assignment 1: Written Policy Memo, followed by presentation to the class and teacher.
  • Group Assignment 2: Creation of a 1 Minute video (the most voted ones are shown in class).

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
    1. Voluntary Assignment 1 (Short Memo) 40%.
    2. Voluntary Assignment 2 (Video) 30%.
    3. Final exam (Shorter version with respect to non attending students) 30%.
    4. Class Active Participation Prize (1 point) to the top 5 Students.
    • What does it mean to be an attending student? 75% presence in class.
    • For the assignments you may work in a team of 2-4 (depending on how many students enroll). You are given the possibility to enroll to a group through Bboard.
    • Assignment 1 Memo: you choose a topic (I have to approve). You work on a brief written policy memo and you present it in class during the last days of class. Active participation to other teams’ presentations is compulsory.
      • Detailed information on how to write the memo and how to make the presentation and examples are provided during class and are available on Bboard.
      • Deadline: Submission of memo by the last day of class (no exceptions). Presentations calendar are posted later in the year, but it is one of the last days of class.
    • Assignment 2 Video: you choose a topic (I have to approve). You can decide to be on the video or, instead, to use any other technique (animation, voice-over ppt, etc.).
      • You produce a one/two minutes video explaining a key concept that we have covered during the course. You may decide on the style of the video freely. You don’t need any special equipment – you can use your cell phone for this if you wish. You are graded on:
        • Effectiveness of your presentation.
        • Correctness and completeness of your presentation.
        • The overall pedagogic effectiveness of your video.
        • Complexity of the concept you decided to present. 
      • You constructively comment and vote videos done by other teams using Board. There is a prize assigned to the best video.
      • Detailed information and examples on video are provided during class.
      • Deadline: Submission of video, at the latest, 10 days before the last day of class.
    • The Final Exam is written and compulsory. It is required to have a minimum of 18/30 in the final written exam to pass. All above requirements expire within the Academic year.  If you do the voluntary assignments, you have to stick to that option throughout.

    Final exam (Long Version) 100%

    • The Final Exam is written.
    • Note that if you choose this type of exam you are still welcomed to  all classes!

    Teaching materials

    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.
    • 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 and click on the summary for policy makers)
    • IPCC 5th Assessment Report. Summary for Policy Maker, Working Group 3 (If the link does not work go to and click on the summary for policy makers)
    • 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.
    • 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,
    • S. BARRETT, Self-Enforcing International Environmental Agreements, Oxford Economic Papers, Vol. 46, pp. 878-894, 1994,
    Last change 22/07/2020 10:29