Insegnamento a.a. 2023-2024


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

Classes: 31 (I sem.)

Suggested background knowledge

Students are expected to be comfortable with basic concepts of econometrics, macroeconomics 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 (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.



  • Introduction to the Climate Change challenge
  • Where do emissions come from
  • How can we reduce emissions
  • Technological Change and Climate Mitigation technologies
  • Understanding the challenges of the energy transition
  • Climate Damages
  • Making Decisions about the Environment (Cost Benefit and Cost Effective Analysis)
  • Who is the social planner? (Inter-temporal and social aggregation issues)
  • Integrated Assessment Models and Social Cost of Carbon
  • 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 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


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
  • Understanding the International Climate Negotiations context
  • 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.)
  • Group assignments
  • Interactive class activities on campus/online (role playing, business game, simulation, online forum, instant polls)


  • 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 may be Asynchronous, depending on the topic
  • Asynchronous information will be followed by short tests (not graded) to check the status of understanding and follow up discussion and feedback in class
  • In class lectures will include gamification, debates 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 x
  • Group assignment (report, exercise, presentation, project work etc.)
  • Active class participation (virtual, attendance)
  • Peer evaluation


Everything described above is only valid for attending students


Not Attending Students may only take the final written general exam.

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 31/05/2023 09:33