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. The professor will introduce each session for about 30 minutes. To have an effective discussion, students will be organized in small groups witch each group being responsible to prepare one topic and present in the respective session. The presentation should be around 20 – 30 minutes and needs to contain more than a literature review. All students are expected to participate in the 30 minutes discussion. We will also invite guest speakers from policy making institutions. Beyond the presentation, students taking the module exam in this course are expected to write a short policy note.

• 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 (with ECB speaker)
• Central banks and the green transition
• Green transition in developing countries
• International climate finance: Mobilizing private finance, dealing with external debt and exchange rate risks

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
• Build capacities to analyse real world problems and contribute to problem solving 
• Strengthen understanding of public policy
• strengthen presentation skills and writing skills

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 give at least one presentation and to write a policy paper. We will have 12 sessions of 90 minutes each (24 hours).

Contribution to the teaching profile

LO 2.1 Adopt a scientific approach to data collection, research and analysis and communicate results with clear, structured and sophisticated arguments
LO 2.2 Display critical thinking, logical and abstract reasoning and develop an independent approach to learning
LO 4.1 Work and communicate effectively as part of a team in an international and multicultural environment
LO 4.2 Recognize ethical dilemmas and contribute to solving them

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. More details to follow.

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 write a policy paper. Details will be communicated in the first class. Active participation in the seminar is important and desired. 

Language(s) of evaluation

• english