Corsi di Studio del Dipartimento di Economia e Statistica "Cognetti de Martiis"

The objective of this module is to offer students the analytical and conceptual tools necessary to  understand the economics of climate change and climate-related policies. 

1) Knowledge and understanding. At the end of the course you will have acquired expertise in the fundamentals of the economics of climate change and mitigation and adaptation policies.

2) Ability to apply knowledge and understanding. Students should be able to apply the knowledge acquired to the analysis of climate change policies. Students will explore the economic roots of the problem, the dimensions and costs of the expected impacts, the criteria for setting decarbonisation objectives, the dynamics that govern international agreements, the tools available for mitigation policies.

3) Autonomy of judgement. Students must be able to critically process the information acquired according to the interpretation of economic theory and theories on the environmental sustainability of economic systems.

4) Communication skills. Students will have to demonstrate the acquisition of correct vocabulary and the ability to discuss the topics addressed in a clear, critical and competent manner.

5) Learning ability. Students must be able to deal with the study of advanced textbooks ('graduate' level) in English, reports and materials relating to national policies and international agreements for climate change produced by governments, environmental protection agencies and organizations international.

Introduction.

International environmental problems: what do they have in common and how do they differ

The economics behind climate change

Climate change damages

The international coordination problems: 30 years of climate agreements.

(i) The UNFCCC. Kyoto, Paris and Glasgow.

(ii) The flexibility mechanisms of the Kyoto Protocol

Setting decarbonisation targets

Applicability of cost-benefit analysis to climate change

Policy instruments:

(i) carbon pricing I - carbon tax

(ii) carbon pricing II - cap& trade systems. The EU-ETS. 

(iii) voluntary carbon offsets

(iv) decarbonization subsidies

(v) command and control approaches

(vi) new and emerging technologies. Carbon Capture and Storage (CCS)

Carbon costing: how to evaluate the cost of carbon in the atmosphere

(i) Price of emission permits in Emission Trading Schemes

(ii) MAC curves

(iii) Social cost of carbon

(iv) Shadow price estimates based on Integrated Assessment Models (IAMs)

Mitigation costs

Corporate climate and transition risks 

(i)  competitiveness impacts of climate change mitigation policies

(ii) stranded assets

(iii) financial risk

(iv) regulatory and compliance risk

The Environmental Kuznets Curve and climate change

Environmental justice

Conclusions

Written exam (allotted time: 90 minutes). The exam includes

(i) 12 questions in the true/false format, whose objective is testing the coverage by students of all main critical issues;

(ii) a brief exercise, aimed at verifying the capacity to apply the conceptual tools acquired in the course;

(iii) an open question whose objective is to allow students to show the depth of their competence and the critical ability they have developed by reading extensively through the suggested literature.

The course is divided into frontal lessons with the projection of teaching material. On the website it is possible to download the material used in lessons and find updated information relating to teaching, bibliographical references, links to internet resources relevant to the course topic.

Some seminars by external experts involved in research or climate policy will support the in-depth analysis of cutting edge topics.