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 trade off between growth and the environment be avoided, 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?
Lecture I: Introduction: Energy Policy, Climate Change and Economic Growth; evidence on drivers of global warming and the effects of global warming on the economy (Rick and Sweder)
Lecture 2: Economics of Discounting (Sweder)
Lecture 3: Growth, Scarce Resources and Directed Technical Change (Sweder)
Lecture 4: Trade, Pollution Havens, and Carbon Leakage (TBD; carbon taxes, trade and border tax adjustments; Rick/Sweder)
Lecture 5: “Distributional aspects of climate policy; Climate Change, poverty and inequality (Rick/Sweder)
Lecture 6: Green Paradoxes (Rick)
Lecture 7: Dealing with Climate Catastrophes (Rick)
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