Economics of Climate Change - Single View

• Stern, N. (2008): The Economics of Climate Change. American Economic Review 98 (2)
• Nordhaus & Boyer (2000). Warming the World. MIT Press.

Advanced Macroeconomics, Advanced Microeconomics, Growth and Distribution

Portfolio: written examination [60%], assignments with presentation [40%]

The aim of this lecture is to provide basic knowledge and key tools for analyzing climate policy. The lecture will first give an overview on climate change, impacts and mitigation options as well as key environmental economic concepts. As climate change is an intertemporal (dynamic) problem, tools for solving intertemporal optimization problems will be presented and applied. Students apply these concepts in assignments individually and in small groups. In particular, students will develop their own numerical climate-economy model to study optimal mitigation paths, carbon prices and growth effects.

Learning objectives:

• Knowing and understanding basic concepts and mechanisms of climate change, global warming, climate damages and associated uncertainties
• Knowledge about international institutions that assess scientific knowledge on climate change
• Understand methods to assess and quantify economic impacts of climate change, incl. social costs of carbon
• Understand and apply methods of intertemporal optimization (Hamiltonian)
• Apply and modify integrated assessment models on climate policy
• Understand and apply basic concepts for analyzing uncertainty with respect to climate change
• Summarize own research findings and present them in class
• Knowledge and economic analysis of key climate policy instruments in practice