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Climate Economics (ECO-AD-CLIMATECO)

ECO-AD-CLIMATECO

Description

Description

This course aims to provide an overview of what environmental economics is and how the field has developed. It is not intended to be an exhaustive survey. Instead, it introduces the main economic objects that structure modern research in environmental and climate economics.
The course starts from the historical foundations of the field: externalities, Pigouvian taxation, the Coase theorem. These classic theories remain central to how economists think about environmental problems today.
The rest of the course goes deeper into four key areas of environmental economics: empirical climate damages; adaptation and climate risk; energy, innovation, and the clean transition; and dynamic welfare analysis through the social cost of carbon and integrated assessment models.
Each session is organized around three layers. First, we study the canonical concepts and papers that shaped the subfield. Second, we discuss modern contributions that remain central to the literature. Third, we consider frontier papers that show where current research is moving. The goal is to give students both a map of influential papers and a clear understanding of the conceptual and methodological links between them.

Assessment

• Class participation, potential class presentation (not mandatory): 15%
• Final research proposal: 85%

Module structure

Session 1: Externalities, regulation, and second-best policy
Historical foundations of environmental economics: externalities, Pigouvian taxation, Coase theorem, prices versus quantities, tradable permits, enforcement, leakage, and second-best regulation.
How should economists think about environmental damages, corrective policy, and the welfare cost of regulation? How do externalities justify environmental policy?
Session 2: Climate damages
How economists estimate the effects of weather and climate on mortality, health, agriculture, energy demand, and macroeconomic outcomes. How do we estimate damages from weather and climate? What can short-run weather variation teach us about long-run climate damages? 
Session 3: Adaptation, spatial equilibrium, and climate risk
How households, firms, and local economies adapt to climate risk through migration, housing markets, defensive investments, insurance, beliefs, and spatial reallocation.
Session 4: Energy, innovation, and the clean transition
How mitigation reshapes energy markets, innovation, industrial policy, electricity systems, climate finance, and macroeconomic allocations.
Session 5: Social cost of carbon, IAMs, and uncertainty
How climate damages are aggregated over time and space through the social cost of carbon, integrated assessment models, discounting, uncertainty, and catastrophic risk.

Readings

Readings combine canonical papers, modern contributions, and frontier research. A broad reading list will be provided, but no readings are mandatory. Instead, the objective is to give students a rich set of resources so that they can explore the field and dig deeper into the topics that interest them most.
 

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