Published Nov 27, 2023
Special topics that may vary with individual instructor's areas of research interest. [Note: This is a repeatable course, subject to different content; it may be completed a total of five times.]
Prereq: Level at least 3A Economics majors
One or more half-courses will be offered at different times as announced by the Department.
This is a topics course. The course offers students an introduction to climate change economics at undergraduate and graduate level. The course discusses primary economic aspects related to our changing climate, such as the economic effects of climate change, the economic costs and benefits of climate mitigation and adaptation, the social costs of carbon, and the use and usefulness of climate policy instruments such as carbon taxation and trading.
The aim of the course is to provide students with a profound understanding of state-of-the-art economic thinking and methodologies addressing climate change, drawing upon seminal literature, studies and readings. The course materials include journal articles, book chapters and reports. Occasionally a guest lecturer will be invited.
| 1) Describe the socioeconomic effects of climate change and the costs of policy inaction. |
| 2) Distinguish between the economic costs and benefits of climate change mitigation and adaptation. |
| 3) Identify the main drivers underlying changes in the social costs of carbon. |
| 4) Clarify the advantages and disadvantages of carbon taxation and carbon trading. |
| 5) Build an integrated assessment model. |
Week | Date | Course description |
1 | 08 & 10 January | Introduction course & climate economics |
2 | 15 & 17 January | Economic impacts of climate change |
3 | 22 & 24 January | Economic costs of climate change in Canada |
4 | 29 & 31 January | The economics of climate mitigation |
5 | 5 & 7 February | Case studies carbon emission abatement costs |
6 | 12 & 14 February | Guest lectures economics of climate engineering by Juan Moreno-Cruz & Eric Croiset |
7 | 19 & 21 February | Reading week – no classes |
8 | 26 & 28 February | Mid-term exam (35%) |
9 | 4 & 6 March | The economics of climate change adaptation |
10 | 11 & 13 March | The social costs of carbon |
11 | 18 & 20 March | Market-based policy options to control greenhouse gas emissions and guest lecture Richard Tol |
12 | 25 & 27 March | Assignment (30%): building your own integrated assessment model |
13 | 01 & 03 April | Assignment continued and class presentations |
| TBD | Final exam (35%) |
| Title / Name | Notes / Comments | Required |
|---|---|---|
| Hsiang and Kopp (2018). An economist's guide to climate change science. The Journal of Economic Perspectives, 32(4): 3-32. https://doi.org/10.1257/jep.32.4.3 | Week 1 | Yes |
| Nordhaus (2019). Climate Change: The ultimate challenge for economics. The American Economic Review, 109(6): 1991-2014. https://doi.org/10.1257/aer.109.6.1991 | Week 1 | Yes |
| Carleton, T.A. and Hsiang, S.M. (2016). Social and economic impacts of climate. Science, 353, aad9837. DOI: 10.1126/science.aad9837 | Week 2 | Yes |
| Kolstad, C.D. and Moore, F.C. (2020). Estimating the economic impacts of climate change using weather observations. Review of Environmental Economics and Policy, 14(1): 1–24. doi: 10.1093/reep/rez024 | Week 2 | Yes |
| Sawyer, D., Ness, R., Clark, D. and Beugin, D. (2020). Tip of the iceberg: Navigating the known and unknown costs of climate change for Canada. Canadian Institute for Climate Choices. https://climateinstitute.ca/reports/tip-of-the-iceberg/ | Week 3 | Yes |
| Sawyer, D., Ness, R., Lee, C. and Miller, S. (2022). Damage control: Reducing the costs of climate impacts in Canada. Canadian Climate Institute. https://climateinstitute.ca/reports/damage-control/ | Week 3 | Yes |
| Gillingham, K. and Stock, J.H. (2018). The cost of reducing greenhouse gas emissions. Journal of Economic Perspectives. 32(4): 53–72. https://doi.org/10.1257/jep.32.4.53 | Week 4 | Yes |
| Kesicki, F. (2011). Marginal abatement cost curves for policy making – expert-based vs. model-derived curves. UCL Energy Institute. Paper presented at the 33rd IAEE International Conference, 6-9 June 2010, Rio de Janeiro, Brazil. https://www.homepages.ucl.ac.uk/~ucft347/Kesicki_MACC.pdf | Week 4 | Yes |
| Ma, C. and Hailu, A. (2016). The marginal abatement cost of carbon emissions in China. The Energy Journal, 37, SI1. http://dx.doi.org/10.5547/01956574.37.SI1.cma | Week 5 | Yes |
| Wu, J., Ma, C. And Tang, K. (2019). The static and dynamic heterogeneity and determinants of marginal abatement cost of CO2 emissions in Chinese cities. Energy, 178: 685-694. https://doi.org/10.1016/j.energy.2019.04.154 | Week 5 | Yes |
| Heutel, G., Moreno-Cruz, J. and Ricke, K. (2016). Climate engineering economics. Annual Review of Resource Economics, 8: 99–118. 10.1146/annurev-resource-100815-095440 | Week 6 | Yes |
| Chambwera, M., Heal, G., Dubeux, C., Hallegatte, S., Leclerc, L., Markandya, A., McCarl, B.A., Mechler, R. and Neumann, J.E. (2014). Economics of adaptation. In: Climate Change 2014: Impacts, Adaptation, and Vulnerability. Part A: Global and Sectoral Aspects. Contribution of Working Group II to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA, pp. 945-977. | Week 9 | Yes |
| Di Falco, S. and Veronesi, M. (2013). How can African agriculture adapt to climate change? A counterfactual analysis from Ethiopia. Land Economics, 89(4): 743-766. https://www.jstor.org/stable/24243700 | Week 9 | Yes |
| Stern, N. (2008). The economics of climate change. American Economic Review: Papers & Proceedings, 98(2): 1–37. https://www.aeaweb.org/articles?id=10.1257/aer.98.2.1 | Week 10 | Yes |
| Ricke, K., Drouet, L., Caldeira, K. and Tavoni, M. (2018). Country-level social cost of carbon. Nature Climate Change, 8: 895–900. https://doi.org/10.1038/s41558-018-0282-y | Week 10 | Yes |
| Stavins, R. (2019). Carbon taxes vs cap and trade: Theory and practice. Discussion Paper ES 2019-9. Harvard Project on Climate Agreements, Cambridge, Massachusetts. https://www.belfercenter.org/sites/default/files/files/publication/es-09_stavins_vers2.pdf | Week 11 | Yes |
| Parry, I., Black, S. and Zhunussova, K. (2022). Carbon taxes or emissions trading systems? Instrument choice and design. IMF Staff Climate Note 2022/006. International Monetary Fund, Washington, DC. https://www.imf.org/en/Publications/staff-climate-notes/Issues/2022/07/14/Carbon-Taxes-or-Emissions-Trading-Systems-Instrument-Choice-and-Design-519101 | Week 11 | Yes |
| Tol, R.S.J. (2023). Chapter 13 Building an integrated assessment model. In: Tol, R.S.J. (2023). Climate ecnomics. Economic analysis of climate, climate change and climate policy. Third edition. Edward Elgar Publishing. | Week 12/13 | Yes |
| Component | Value |
|---|---|
| Mid-term exam | 35% |
| Group assignment | 30% |
| Final exam | 35% |
Students will write a mid-term exam and a final exam, which each count for 35% of the overall grade for the course. Additionally, students will build their own integrated assessment models in groups. This group assignment and presentation will make up the remaining 30% of the final grade for the course.
The mid-term and final exams will be based on the materials covered in class. The course grade will be at the discretion of the instructor. The guidelines for this are as follows. All components making up the final grade for the exams are equally graded and weighted across undergraduate and graduate students. Graduate students will be given an extra question in the mid-term and final exams.
Text matching software (Turnitin) will be used to screen assignments in this course. This is being done to verify that use of all material and sources in assignments is documented. In the first week of the term, details will be provided about the arrangements for the use of Turnitin and alternatives in this course. See Administrative Policy below for more information and links.
All deferred Final Exam requests for economics courses are administered by the Economics Undergraduate Office. Please consult the Deferred Exam Policy at
https://uwaterloo.ca/economics/undergraduate/resources-and-policies/deferred-final-exam-policy.
Academic integrity: In order to maintain a culture of academic integrity, members of the University of Waterloo community are expected to promote honesty, trust, fairness, respect and responsibility. [Check the Office of Academic Integrity for more information.]
Grievance: A student who believes that a decision affecting some aspect of their university life has been unfair or unreasonable may have grounds for initiating a grievance. Read Policy 70, Student Petitions and Grievances, Section 4. When in doubt, please be certain to contact the department’s administrative assistant who will provide further assistance.
Discipline: A student is expected to know what constitutes academic integrity to avoid committing an academic offence, and to take responsibility for their actions. [Check the Office of Academic Integrity for more information.] A student who is unsure whether an action constitutes an offence, or who needs help in learning how to avoid offences (e.g., plagiarism, cheating) or about “rules” for group work/collaboration should seek guidance from the course instructor, academic advisor, or the undergraduate associate dean. For information on categories of offences and types of penalties, students should refer to Policy 71, Student Discipline. For typical penalties, check Guidelines for the Assessment of Penalties.
Appeals: A decision made or penalty imposed under Policy 70, Student Petitions and Grievances (other than a petition) or Policy 71, Student Discipline may be appealed if there is a ground. A student who believes they have a ground for an appeal should refer to Policy 72, Student Appeals.
Note for students with disabilities: AccessAbility Services, located in Needles Hall, Room 1401, collaborates with all academic departments to arrange appropriate accommodations for students with disabilities without compromising the academic integrity of the curriculum. If you require academic accommodations to lessen the impact of your disability, please register with AccessAbility Services at the beginning of each academic term.
Turnitin.com: Text matching software (Turnitin®) may be used to screen assignments in this course. Turnitin® is used to verify that all materials and sources in assignments are documented. Students' submissions are stored on a U.S. server, therefore students must be given an alternative (e.g., scaffolded assignment or annotated bibliography), if they are concerned about their privacy and/or security. Students will be given due notice, in the first week of the term and/or at the time assignment details are provided, about arrangements and alternatives for the use of Turnitin in this course.
It is the responsibility of the student to notify the instructor if they, in the first week of term or at the time assignment details are provided, wish to submit alternate assignment.