This course introduces students to both conceptual foundations and empirical evidence on the economics of climate change, climate policy design, and financial market responses thereto. It seeks to address questions such as: What are the costs and benefits of competing responses to the climate challenge? What roles can/do financial markets play in facing climate risks?
Learning objective
After taking this course, students should: - Understand integrated assessment modelling/thinking about the climate, energy markets, and the macroeconomy and be able to run simplified versions of such models in Excel - Know benchmark estimates of the economic impacts of climate change - Understand the trade-offs between different policy and societal responses both conceptually and empirically based on policy practice - Understand how financial markets should be vs. are empirically responding to climate and policy risks
Content
This course teaches both the core analytic tools and surveys new empirical evidence on the economics of climate change, climate policy, and financial market responses thereto. The first half of the course presents an integrated assessment of the climate, energy markets, and the economy. We build a framework for analyzing the economic impacts of both climate change and climate policy. We then review empirical evidence on both climate change impacts and policy practice. The second part of the course focuses on financial markets. We review relevant core concepts in finance with a focus on asset pricing and use this framework as a basis for thinking about how markets should be responding to climatic and policy risks. We then review empirical evidence on how financial markets appear to be responding in reality with examples such as from housing, equity, and bond markets. At the end of the course, students should have stronger foundations in economics and finance and broad knowledge of the economic and financial risks and opportunities posed by climate change.
Course evaluation: at the end of the course, there will be a written exam covering the topics of the course.
Lecture notes
Lecture slides will be available on the site of the lecture
Prerequisites / Notice
It is highly recommended (but not required) that students have completed introductory micro- and macroeconomics before taking this class.
Competencies
Subject-specific Competencies
Concepts and Theories
fostered
Techniques and Technologies
fostered
Method-specific Competencies
Analytical Competencies
fostered
Decision-making
fostered
Problem-solving
fostered
Personal Competencies
Critical Thinking
fostered
Performance assessment
Performance assessment information (valid until the course unit is held again)
Performance assessment as a semester course