This course provides an interdisciplinary introduction to climate change and its implications for natural systems, human societies, and economic and policy decision-making. Drawing on expertise from across the University, and with support from Penn Climate, the course integrates perspectives from climate science, economics, finance, law, health, engineering, anthropology, political science, public policy, and communications to examine the causes of climate change, its current and projected impacts, and the range of responses at the individual, organizational, and societal levels. The course offers students from across the university a unique opportunity to acquire a broader perspective on climate change than their respective disciplines would. The course brings together climate experts who will present and engage in discussion with the students and the instructor, who will play an active role as a “host” of each lecture, and provide context and connections across the many disciplines, lead class exercises, give some of the lectures, and supervise student projects.
Over the last several decades, energy markets have become some of the most dynamic markets of the world economy. Traditional fossil fuel and electricity markets have been seen a partial shift from heavy regulation to market-driven incentives, while rising environmental concerns have led to a wide array of new regulations and “environmental markets”. The growth of renewable energy could be another source of rapid change, but brings with it a whole new set of technological and policy challenges. This changing energy landscape requires quick adaptation from energy companies, but also offers opportunities to turn regulations into new business. The objective of this course is to provide students with the economist’s perspective on a broad range of topics that professionals in the energy industry will encounter. Topics include the effect of competition, market power and scarcity on energy prices, the impact of deregulation on electricity and fossil fuel markets, extraction and pricing of oil and gas, geopolitical uncertainty and risk in hydrocarbon investments, the environmental impact and policies related to the energy sector, environmental cap-and-trade markets, energy efficiency, the economics and finance of renewable energy, and recent developments in the transportation sector.
This course examines environmental and energy issues from an economist’s perspective. Over the last several decades, energy markets have become some of the most dynamic markets of the world economy, as they experienced a shift from heavy regulation to market-driven incentives. First, we look at scarcity pricing and market power in electricity and gasoline markets. We then study oil and gas markets, with an emphasis on optimal extraction and pricing, and geopolitical risks that investors in hydrocarbon resources face. We then shift gears to the sources of environmental problems, and how policy makers can intervene to solve some of these problems. We talk about the economic rationale for a broad range of possible policies: environmental taxes, subsidies, performance standards and cap-and-trade. In doing so, we discuss fundamental concepts in environmental economics, such as externalities, valuation of the environment and the challenge of designing international agreements. At the end of the course, there will be special attention for the economics and finance of renewable energy and policies to foster its growth. Finally, we discuss the transportation sector, and analyze heavily debated policies such as fuel-economy standards and subsidies for green vehicles. Prerequisites: An introductory microeconomics course (ECON1, or another course approved by the instructor) will be sufficient in most cases; BEPP 250 or an equivalent intermediate microeconomics course is recommended.
Climate change might be the defining challenge of our times, with a wide range of effects on financial markets and the broader economy. At the same time, financial markets play an important role in financing the transition to a net-zero economy, and incentivizing firms and investors to adapt their strategies. In this course, we examine how climate risks—both physical and regulatory—affect firms, financial markets (including equity, corporate debt, green bonds, municipal bonds, insurance, and carbon markets), and markets for energy, real estate and mortgages. We also examine the role that firms’ disclosures and third-party information sources play. Because financial markets are shaped by the information that is available to market participants, we investigate the impact of ESG reporting and rating agencies, including the costs and benefits of regulating ESG reporting and the impact of greenwashing. In the second part of the course, we study how governments and private investors finance investments in climate technologies. Here, we discuss various financial instruments that have been developed to address climate-change concerns. Given the enormous importance of electrification as a pathway towards a low-carbon future, there is special emphasis on renewable energy finance and economics. We also discuss the latest evidence of how climate risk has shaped decisions inside organizations, such as spin-offs, hedging, and the structure of executive-compensation contracts.