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Home | Courses | Climate Change

Climate Change

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Course description

Short subject description:

This course focuses on climate change: one of the greatest challenges of our time. What can the science of economics teach us about its causes and potential solutions? What are the costs and benefits of climate change? Its impact on poverty? Should we tax carbon, cap-and-trade emission rights, or subsidize solar and wind power? Does the answer depend on how we value the future? Why/when should we discount the distant future less than the proximate future? What is the impact of risk and true uncertainty (ambiguity) on the discount rate? Can a tradeoff between growth and the environment be avoided, and if so with what sort of policies? Does trade harm the environment? Will our industry move abroad if we take a leading role and 'go it alone'? Can well-intended climate policies actually accelerate global warming? What are good second-best climate policies? How to deal with climate tipping points? What is the international incidence of climate change and of the climate policies needed to combat it? Why is it so difficult to negotiate international agreements?

Course literature

Acemoglu, D., Philippe Aghion, Leonardo Bursztyn and David Hemous (2012). The Environment and directed technical change, American Economic review, 102, 1, February, 131-166(36)

Aichele, R. and G. Felbermayr (2015). Kyoto and Carbon Leakage: An Empirical Analysis of the Carbon Content of Bilateral Trade. Review of Economics and Statistics, March, 97, 1, 104-115

Balistreri, Edward J. ,Thomas F. Rutherford. 2012. Subglobal carbon policy and the competitive selection of heterogeneous firms, Energy Economics 34(2): S190-S197 https://doi.org/10.1016/j.eneco.2012.08.002

Barnett, W. (2020). A run on oil? The implications of climate policy and stranded assets risk, Arizona State University. https://drive.google.com/file/d/1wmy0FfI-kVsDQcr6z...

Barrett, S., Environment & Statecraft, The Strategy of Environmental Treaty Making.

Barrett, S. (2016). Coordination vs. voluntarism and enforcement in sustaining international environmental cooperation, PNAS, 113, 51, 14515-14522.

Barrett, S. and A. Dannenberg (2017). Tipping versus cooperating to supply a public good, Journal of the European Economic Association, 15, 4, 910-941.

Böhringer, C., J. Carbone and T. Rutherford (2016). “The Strategic Value of Carbon Tariffshttps://www.aeaweb.org/articles?id=10.1257/pol.20130327

Böhringer, C., C. Fischer, and K.E. Rosendahl (2014). Cost-effective unilateral climate policy Design: Size Matters. Journal of Environmental Economics and Management, 67(3): 318–339. doi:10.1016/j.jeem.2013.12.008

Burke, M., S. Hsiang and E. Miguel (2015). Global-non-linear-effect-of-temperature-on-economic-production, Nature, 527, 7577.

Bremer, T.S. van den and F. van der Ploeg (2019). The risk-adjusted carbon price. https://www.ifo.de/DocDL/cesifo1_wp7592.pdf

Cai, Y., T.M. Lenton, T.S. Lontzek (2016): Risk of multiple climate tipping points should trigger a rapid reduction in CO2 emissions. Nature Climate Change. https://doi.org/10.1038/nclimate2964

Cai, Y. and T. Lontzek (2019). The social cost of carbon with economic and climatic risks, Journal of Political Economy, 127, 6. https://www.journals.uchicago.edu/doi/abs/10.1086/...

Cavalcanti, T., H. Zeina and C. Santos, “Climate Change Mitigation Policies: Aggregate and Distributional Effects”, CEPR DP no 15419

Copeland, B.R. and M.S. Taylor (2003). Trade and the Environment, Princeton University Press, Chapters 2 and 5.

Cosbey, A., S. Droege, C. Fischer, and C. Munnings (2019). Developing guidance for implementing border carbon adjustments: Lessons, cautions, and research needs from the literature, Review of Environmental Economics and Policy, 13, 1, Winter, 3–22. https://doi.org/10.1093/reep/rey020

Dechezlepretre, A. and M. Sato (2017). The impacts of environmental regulations on competitiveness, Review of Environmental Economics and Policy. https://academic.oup.com/reep/article/11/2/183/404...

Fischer, C. and A. K. Fox (2012). Comparing policies to combat emissions leakage: border tax adjustments versus rebates, Journal of Environmental Economics and Management. 64 (2): 199–216 (September). doi:10.1016/j.jeem.2012.01.005

Harstad, B., Francesco Lancia and Alessia Russo (2020), “Policies and Instruments for self-enforcing treaties”, CEPR Discussion paper no. 15044

Hassler, J., P. Krusell and J. Nycander (2016), “ Climate Policy”, Economic Policy

Martin, Ralf, Mirabelle Muûls, Laure B. de Preux, and Ulrich J. Wagner (2014). Industry compensation under relocation risk: a firm-level analysis of the EU Emissions Trading Scheme, American Economic Review, 104(8): 2482-2508.

Gerlagh, R. (2011).Too much oil, CESifo Economic Studies, 57, 1, 79-102. https://academic.oup.com/cesifo/article-abstract/5...

Lemoine, D. and C. Traeger (2014), Watch your step: optimal policy in a tipping climate”, American Economic Journal: Economic Policy, 6, 1, 137-166.

Lockwood, B. and J. Whalley (2010), “Carbon-motivated Border tax Adjustments: Old Wines in Green bottles?”, The World Economy doi: 10.111/j.1467-9701.2010.1285.x

Nordhaus, W. (2015), “Climate Clubs: Overcoming Free Riding in International Climate Policy”, AER 2015, 105(4)

Nordhaus, William D & Yang, Zili (1996). A Regional Dynamic General-Equilibrium Model of Alternative Climate-Change Strategies, American Economic Review, 86, 4, 741-65.

Olijslagers, S. and S. van Wijnbergen (2021), “Discounting the Future: on Climate Change, Ambiguity Aversion and Epstein-Zin preferences”, CEPR Discussion Paper 13708

Ploeg, F. van der (2016). Second-best carbon taxation in the global economy: the Green Paradox and carbon leakage revisited, Journal of Environmental Economics and Management, 78, 85-105. https://www.sciencedirect.com/science/article/abs/...

Ploeg, F. van der (2020), “Discounting and Climate Policy”, forthcoming, Oxford Research Encyclopedia of Economics and Finance.

Ploeg, F. van der and C. Withagen (2015). Global warming and the Green Paradox: a review of adverse effects of climate policy, Review of Environmental Economics and Policy, 9, 2, 285-303. https://ora.ox.ac.uk/objects/uuid:e9a1d7df-ebc1-4a04-a80a-dee639303080

Ploeg, F. van der and A.J. de Zeeuw (2018). Climate tipping and economic growth: precautionary saving and the social cost of carbon, Journal of the European Economic Association, 16, 5, 1577-1617. https://academic.oup.com/jeea/article-abstract/16/...

Rezai, A. and F. van der Ploeg (2016). Second-best renewable subsidies to de-carbonize the economy: commitment and the Green Paradox, Environmental and Resource Economics, 66, 409-434. https://link.springer.com/article/10.1007/s10640-0..." https://link.springer.com/article/10.1007/s10640-0...

Stavins, R. (2019). Carbon Taxes vs. Cap and Trade: Theory and Practice

Stern, N. (2006), “The Economics of Climate Change: the Stern Review”, https://webarchive.nationalarchives.gov.uk/2010040...://www.hm-treasury.gov.uk/stern_review_report.htm

Weitzman, Martin L. (1974). Prices vs. quantities, Review of Economic Studies, 41, 4, 477–91.

Weitzman, Martin L. (2007), “A review of the Stern review on the Economics of Climate Change”, JEL (45)