Energy is a basic necessity of daily life and a vital input to industry in any society around the world. New technologies, especially renewable power generators such as wind and solar are changing the industry. Also, new climate policies have a growing influence on the economics and practical functioning of the energy systems, especially the electricity industry. Firstly, the course aims to give a deeper theoretical insight regarding economic externalities (such as global warming). A number of the classical economic instruments are presented, such as Pigovean taxes, cap-and-trade programs, subsidies and mandates. The theory addressed has broad applications, also in the field of public finance and public policy. Secondly, the course gives an overview of the economics of new potential decarbonization technologies, such as hydrogen, heat pumps, electric cars and gas as a transition fuel. Thirdly the most recent decarbonization developments will be discussed.
