75577 - Economics of Climate Change

Course Unit Page

Academic Year 2023/2024

Learning outcomes

The student will acquire basic knowldege of economics of climate. The students will be able to understand the cost of actions and inactions of climate applications to society.

Course contents

The course is the first module of the integrated course ‘Climate-related risks and commodity markets’. The first module will take place in the first semester (period P), from 18.09.2022 to 28.10.2022. Please see here for information about the second module, 'Climate policy and commodity markets', held by Prof. Niko Jaakkola.

The module will cover the following topics:

  • Climate change: the physical basis and impacts
  • Carbon emission drivers; abatement strategies; investment needs
  • Transition dynamics and socio-economic impacts
  • Climate-related macro-financial risks; physical/financial asset stranding
  • Mitigation policies: carbon pricing and permit markets
  • Sustainable finance policy-making; central banks and financial supervisors
  • Climate economic modelling: the DICE model, IAMS and CGE models
  • Neoclassical transition modelling approaches
  • Complexity-driven transition modelling approaches
  • Production and financial networks


Most of the readings will be in the form of academic articles or policy reports. All readings will be available on Virtuale or through UniBo subscriptions.

A key reading for the course is the set of recent reports (Assessment Report 6) by the Inter-governmental Panel on Climate Change (IPCC), available at this link.

While there is no specific textbook for this course, interested students can we refer to:

  • Economides, G., Papandreou, A., Sartzetakis, E. and Xepapadeas A. (2018) ‘The economics of climate change’, Bank of Greece (freely available at this link)
  • Tol, R. (2019) ‘Climate Economics’, 2nd edition, Edward Elgar Publishing (teaching material available at this link)
  • Keohane, N.O., and Olmstead, S.M. (2016) ‘Markets and the Environment’, 2nd edition, Island Press

Teaching methods

The course will be a combination of frontal lectures, in-class exercises and student-led presentations/discussions.

Assessment methods

The grade for Module I (this course) will be the combination of:

  • Participation (10%). This will be evaluated considering attendance and active participation to both lectures and tutorial classes.
  • Problem sets (30%). Each student will submit eight problem sets during the course. Problem sets will be corrected during tutorial classes, and the deadline for submission is 23.59 of the day before the tutorial. Submission is individual, and will take place through Virtuale. Late submissions will not be accepted.
  •  Group-work (30%). Each student will self-allocate to a topic group (of roughly three members). Topics will be chosen among the ones provided by lecturer, but alternative topic proposals can be considered. Each group will: i) present the intermediate results of their work during tutorial classes in the second half of the course; ii) submit an essay by Sunday 5 November at 23.59 via Virtuale.
  •  Exam (30%). A written exam for the module will take place on 2 November, 10.00am. The exam will last 90 minutes and will include open essay-style questions, exercises and/or multiple choice questions. While this is strongly discouraged, students can decide to reject the grade obtained and try their luck with a ‘full’ exam, combining Module I and II. In this case, grades for Module I problem sets and groupwork will remain valid.

The overall grade for the integrated course will be a simple average of the grades for the two modules. Grading is as follows:

  • <18 fail
  • 18-23 pass
  • 24-27 good
  • 28-30 very good
  • 30L excellent

Teaching tools

All the course material (slides, readings etc.) will be made available on Virtuale.

Office hours

See the website of Emanuele Campiglio