The economics of climate change

Seminar: The Economics of Climate Change

Instructor: Prof. Dr. Guntram Wolff

For students at Masters level

Language: the course will be taught in English

Short description: Scientific evidence is clear: human activities have released enough greenhouse gases (GHG) in the atmosphere to have altered the climate, with already strong effects on ecosystems, societies, and economies. On current emissions paths, climate change is set to become dramatically worse. To limit global warming, and hence avoid the worst-case scenarios predicted by climate science, the world economy must rapidly reduce its GHG emissions and reach climate neutrality within the next three decades.

In this seminar, we want to learn about the complex interplay between climate change and economic activity. We will start off by asking the question, whether economic growth is compatible with declining emissions or whether, instead, societies need to accept de-growth and lower living standards to ensure rapid de-carbonization. Achieving decarbonization requires global actions: we will study the global public good and tragedy of the commons problems and solutions that have been proposed – this will help us understand why progress in the UN-based COP summits is insufficient, and why global emissions continue to rise. We will then study the domestic distributional effects of climate policy. Public finance and decarbonization also interact in complex ways and will be studied. Furthermore, the role of industrial policy and innovation for decarbonization will be explored. We also want to look at the role the financial system and central banks play in climate policy.  

Organization of seminar

This is an interactive seminar for all students interested in one of the most pressing global public policy problems. Besides the introduction, we will have 12 sessions in which we want to jointly explore these topics. Attendance is obligatory.

After three introductory sessions, participants will be split in three groups. Each group has to focus on one specific topic, develop a research agenda and eventually write a major research paper based on a combination of literature, data analysis, interviews with academics, practitionars and policy makers, AI-driven methods and other methods. Each group has to present three times in the seminar.
- First with preliminary research ideas (session 4, 5 or 6), 
- with intermediate results (session 7,8, or 9)
- finally to defend the final research piece (session 10, 11, or 12).
 
The final research piece should be sufficiently polished to be publishable by the group. 

Grading will be based on presentation, participation and feedback given to other groups, and the quality of the final research paper 

Precise topics will be defined but will gravitate around the broad set of issues:

• Introduction on content; discussion, assignment of presentations to students
• An overview of the economics of decarbonization: growth vs degrowth
• Global climate governance: COPs & Clubs
• Global energy transition: electrification, hydrogen, energy efficiency, behavioral change, and more
• The geopolitics of the green deal
• Introduction to EU climate policy (with EU official speaking)
• Climate policy and public finance implications
• Distributional effects of climate policy
• Green innovation and green industrial policy
• Mobilizing the financial system for decarbonization
• Central banks and the green transition
• Green transition in developing countries
• Regional or local climate policies

The seminar will be based on our recent book “The macroeconomics of decarbonisation”, published at Cambridge University Press as well as additional reading. More details to follow.

• Learn key principles and concepts of climate and the interrelation between climate and economics
• Strengthen methodological thinking and analytical skills
• Strengthen leadership skills via interactive learning
• Strengthen teamwork skills with teamwork centred work
• Build capacities to analyse real world problems and contribute to problem solving 
• Strengthen understanding of public policy
• strengthen presentation skills and writing skills
• employ cutting edge methodologies such as AI and learn the benefits and limits thereof
• critically reflect on ethical limits and societal implications of research

Required and Corequired knowledge and skills

good understanding of introductory micro and macroeconomics as well as introductory empirical methods

The seminar will consist of some traditional teaching of the professor, presentations of external policy makers. Since it is a seminar, the main emphasis is on student presentations, flipped classroom and classroom discussions. It is expected that students prepare each class. Every student is expected to present and actively engage in discussions as well as co-author a major research report. We will have 12 sessions of 90 minutes each (24 hours).

References, bibliography, and recommended reading

The seminar will be based on our recent book “The macroeconomics of decarbonisation”, published at Cambridge University Press as well as additional reading driven by the research questions each team is focussing on. I expect nuanced understanding of research papers to be communicated orally during presentations.

Campus

Solbosch

Method(s) of evaluation

• Oral presentation
• Written report

Oral presentation

Written report

Every student is expected to present in the seminar and to contribute to a policy-relevant research paper in a group. Details will be communicated in the first class. Active participation in the seminar is important. 

Language(s) of evaluation

• english