Climate Change Economics

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.

Main instructor: Silvester van Koten, Ph.D.

In Spring 2025, this course was streamed to partner universities in five countries and supported by five local instructors:

Gharib Harutyunyan (Armenian State University of Economics in Gyumri, Armenia),

Piroska Harazin (University of Debrecen, Hungary),

Małgorzata Burchard-Dziubińska (University of Lodz, Poland),

Veronika Gežík (Comenius University, Slovakia), and

Oleksandr Kyfyak (Yuriy Fedkovych Chernivtsi National University, Ukraine).

Over 130 students successfully completed the course and were awarded the course certificate.

Climate change economics applies economic theory to explain key concepts, analytical tools, and their policy implications. As a practical application, EU climate policies were examined at both the EU and national levels.

Local sessions applied these insights to national climate policies, including comparisons with the global and EU levels for more insight. Specifically, four key policy questions were addressed at the national level, mirroring the discussions at the EU level in the central lectures:

1. What is the present state of the GHG emissions? The analyses present main indicators, including absolute GHG emissions, per capita emissions, emission intensity, and the relationship between these indicators, GDP and population change. See country level data for Armenia 1 & 1b, Hungary, Poland, Slovakia, Ukraine .
2. What are the contributions of the main carbon-emitting sectors? These include: Energy (energy supply, manufacturing, transportation, and residential use and buildings), Agriculture, Industrial processes, Waste, and Land Use, Land-Use Change and Forestry (LULUCF). The sectoral structure of emissions highlights both challenges and opportunities within each country’s economy and policy framework. The following presentations overview sectoral structure of emissions in Armenia, Hungary, Poland, Slovakia, and Ukraine.
3. What are the national government's plans to decarbonize? What are the specific aims and the specific measures? Every EU member state has adopted a national decarbonization plan, typically outlined in detail in its National Energy and Climate Plan (NECP). These plans are reviewed and assessed in EU-level documents, which provide commentary and evaluation. The main policy aims include: renewable electricity targets, energy efficiency obligations, emission reduction quotas, green certification schemes, and technology mandates. The measures are organized in three groups: explicit emission pricing, standards and regulations, and complementary policies that offset distributional effects. Local instructors and students examined national decarbonization plans in Armenia 3 & 3b, Hungary, Poland, Slovakia, and Ukraine.
4. Evaluation of the measures taken. An appraisal of selected policy measures, assessing the extent to which national approaches align with or deviate from key principles of economic theory, such as cost-effectiveness, efficiency, and equity was conducted at country level – Armenia, Hungary, Poland, Slovakia, and Ukraine.