Unit 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