Learning Objectives
5 objectives- Understand fundamental economic concepts related to climate change, including market failures and externalities.
- Apply cost-benefit analysis techniques to evaluate climate policies considering uncertainty and discounting.
- Analyze the economic implications of mitigation and adaptation strategies for climate change.
- Evaluate international climate agreements and the role of green finance in mobilizing climate investments.
- Assess behavioral and distributional aspects influencing climate policy outcomes and technological innovation.
Content Outline
PreviewUnit 2390: Economics of Climate Change
1. Introduction to Climate Change Economics
- Overview of climate change and its economic significance
- Key economic concepts:
- Market failures and externalities
- Public goods and common-pool resources
- The rationale for policy intervention
- Frameworks for analyzing climate economics
2. Cost-Benefit Analysis in Climate Change Economics
- Principles of cost-benefit analysis (CBA)
- Application of CBA to climate policies and projects
- Discounting future costs and benefits
- Dealing with uncertainty and risk in CBA
- Non-market valuation techniques:
- Contingent valuation
- Hedonic pricing
- Choice modelling
3. The Economics of Mitigation Strategies
- Overview of greenhouse gas mitigation options
- Carbon pricing mechanisms:
- Carbon taxes
- Emissions trading systems (ETS)
- Incentives for renewable energy adoption
- Energy efficiency measures and their economic impacts
- Economic appraisal of mitigation policies
4. Adaptation Economics and Resilience
- Economic rationale for adaptation investments
- Types of adaptation measures:
- Infrastructure upgrades
- Insurance and risk transfer mechanisms
- Community-based adaptation and ecosystem-based approaches
- Cost-effectiveness and cost-benefit analysis of adaptation
- Enhancing resilience through economic policies
5. International Climate Agreements and Economics
- Overview of major international agreements (Kyoto Protocol, Paris Agreement)
- Economic implications of global cooperation
- Burden-sharing and equity considerations:
- Common but differentiated responsibilities
- Climate finance mechanisms
- Challenges in enforcement and compliance
6. Green Finance and Climate Investment
- Definition and scope of green finance
- Instruments for climate investment:
- Green bonds
- Carbon markets and offsets
- Sustainable banking and investment funds
- Role of public and private sectors in financing climate initiatives
- Evaluating the impact and risks of green financial instruments
7. Distributional Impacts of Climate Policies
- Understanding distributional effects across socioeconomic groups
- Regional and sectoral impacts
- Equity and fairness in policy design
- Addressing social inequalities through climate policies
- Policy tools for mitigating adverse distributional impacts
8. Behavioral Economics and Climate Change
- Behavioral biases affecting climate-related decisions
- Nudges and behavioral interventions to promote sustainability
- Collective decision-making challenges
- Examples of successful behaviorally informed climate policies
9. Technological Innovation and Climate Change Economics
- Role of innovation in mitigation and adaptation
- Economic incentives for research and development
- Technology diffusion and adoption barriers
- Innovation policies and their effectiveness
- Case studies of transformative climate technologies
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