The Climate and The Economy, 7.5 credits

About the course

The aim of this course is to use economic tools to analyze environmental issues, especially those concerning climate change related to global warming. The course will introduce such tools and their use for analyzing the interplay between the economy and climate. It will also contemplate how economic policy can be used to influence the future development of the economy and the climate.

The focus of the course is on analyzing these issues on a global and regional level in the so-called general equilibrium: both the supply and demand of fossil fuels will thus be studied and modeled. The analysis of the economic policy regarding climate change will include measures designed to reduce and postpone the emission of greenhouse gases (mitigation), as well as measures designed to lessen the harmful effects of global warming (adaptation).

The course will begin with an introduction to useful models from Public Finance and growth theory. The models will be formulated mathematically rather than graphically in order to allow for quantitative, i.e. empirically oriented, analysis. The course will also include a simple description of certain scientific connections, especially the carbon cycle model. However, a critical review of these connections is outside the scope of this course.

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