363-1106-00L  The Economics of Climate Change

SemesterAutumn Semester 2023
LecturersA. Goussebaïle
Periodicityyearly recurring course
Language of instructionEnglish


363-1106-00 GThe Economics of Climate Change2 hrs
Tue10:15-12:00ML F 38 »
A. Goussebaïle

Catalogue data

AbstractAfter an introduction to the issue of climate change, we will see the policy instruments that can be used to mitigate it. We will then discuss the optimal level of these policies. Finally, we will analyze the political constraints that limit their implementation.
ObjectiveStudents will acquire a general understanding of the problem faced by the society with climate change, as well as the ways and the obstacles to deal with it. From a technical point of view, this course intends to teach participants the main tools used in economic sciences to discuss the problem of climate change, understand its key determinants, advise policy makers and understand the constraints of the latter.
ContentThe introductory part will explain why climate change represents a main issue for our societies. We will see the anthropogenic causes (i.e. greenhouse gas (GHG) emissions), the physical mechanism and the economic consequences of climate change. Then, we will introduce economic science modeling with the notion of externality to explain the excessive GHG emissions and characterize the societal challenge raised by climate change.

The second part of the course will present the different policy instruments for reducing GHG emissions (emission taxes, abatement subsidies, cap-and-trade system, standards). We will compare their performance and their distributional effects with regard to several aspects, with a special focus on the impact of uncertainty.

The third part of the course will focus on the level at which climate policies should be implemented, which depends on the cost of GHG emission abatement and the benefit of climate change mitigation. We will analyze the main drivers of the optimal emission abatement level, in particular discounting. We will also detail the economic models developed to evaluate the optimal abatement, namely Integrated Assessment Models.

The last part of the course will address the reasons why policy makers have only weakly implemented climate change policies up to now. We will discuss the difficulties of finding an international agreement for GHG emission reduction in a world with a large number of countries. We will also see why the time delay between GHG emissions and climate change may make society and policy makers reluctant to implement significant climate change policies.
Lecture notesLecture Notes of the course will be sent by email to officially subscribed students.
LiteratureThe main reference of the course is the set of lecture notes; students will also be encouraged to read some influential academic articles dealing with the issues under study.
Prerequisites / NoticeElementary knowledge of economic theory is a plus but not a prerequisite.
Subject-specific CompetenciesConcepts and Theoriesassessed
Techniques and Technologiesassessed
Method-specific CompetenciesAnalytical Competenciesassessed

Performance assessment

Performance assessment information (valid until the course unit is held again)
Performance assessment as a semester course
ECTS credits3 credits
ExaminersA. Goussebaïle
Typegraded semester performance
Language of examinationEnglish
RepetitionRepetition only possible after re-enrolling for the course unit.

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Offered in

Management, Technology and Economics MasterNatural ResourcesWInformation