Climate Economics examines the economic forces that drive climate change, the economic and technological pathways through which greenhouse gas emissions can be reduced, and the role of ecological systems in supporting mitigation, adaptation, and long-run sustainability. The course is organised in two complementary parts. The first part focuses on the economics of decarbonisation: sources of emissions, emissions scenarios, mitigation options, the costs of emission reduction, and the design of climate policy. Particular attention is paid to the low-carbon transition, including net-zero pathways, and transition risks such as stranded assets. The second part turns to biodiversity, ecosystem services, and nature-based solutions. It examines how ecological systems generate economic value, how biodiversity loss interacts with climate change, and how conservation and restoration can contribute to resilience and sustainable development.

The course introduces the principal economic frameworks used to analyse climate mitigation and environmental change and applies them to contemporary policy questions. Students examine how technological possibilities, relative prices, institutional constraints, and distributional considerations shape climate policy and transition pathways in practice. Throughout, the course distinguishes between what is technically feasible, what is economically efficient, and what is politically and institutionally implementable.

By linking the economics of decarbonisation to the economics of biodiversity and natural systems, the course provides an integrated perspective on climate and sustainability policy. It equips students to evaluate climate-transition strategies, to assess the economic significance of ecological assets and risks, and to engage critically with current debates on mitigation, adaptation, and environmental governance.

By the end of the course, students will be able to:

-          explain the principal economic drivers of climate change, including greenhouse gas emissions, technological change, and the structure of energy use;

-          use emissions decomposition frameworks, in particular the Kaya identity, to interpret historical emissions trends and to structure projections of future emissions;

-          analyse climate-mitigation pathways by evaluating the main channels of decarbonisation, including energy efficiency, fuel switching, electrification, carbon removal, and broader transition dynamics;

-          assess the costs of emission reduction and explain why abatement-cost estimates differ across models, with particular attention to technological assumptions, capital-stock turnover, policy timing, and institutional constraints;

-          evaluate the economic significance of biodiversity, ecosystem services, and nature-based solutions, and relate these to broader questions of climate resilience and sustainability;

-          apply economic reasoning to contemporary debates on climate transition, environmental governance, and sustainable development.

Attendance is mandatory for at least 80% of the course sessions, in accordance with university regulations. Active participation is essential to successfully complete the course, as many sessions involve group work, case studies, and in-class discussions. Exceptions or absences beyond this limit require formal and prior approval, valid justification.

The Climate Economics course adopts a comprehensive teaching and learning approach that combines foundational instruction, interactive engagement, and applied group work. Core concepts are introduced through lectures and enriched by interactive discussions, fostering critical thinking and in-depth understanding. Real-world case studies are integrated into the curriculum to illustrate the practical application of economic theories and climate policies.

Students engage in collaborative group projects, where they design and analyze nature-based solutions and biodiversity-focused interventions, developing teamwork and problem-solving skills. Independent study and literature analysis further enhance learning by encouraging students to engage critically with academic research and apply their insights to complex climate challenges. This blended teaching design ensures students gain both theoretical knowledge and practical expertise, preparing them to address interdisciplinary issues in climate economics effectively.

The course is assessed through continuous evaluation and reflects the two-part structure of the syllabus. Part I focuses on climate mitigation, transition, and policy; Part II focuses on biodiversity, ecosystem services, and nature-based solutions. The assessment is designed to evaluate both analytical understanding and the ability to apply course concepts to concrete policy questions.

Quizzes (20 points): Quizzes assess students' grasp of key concepts and encourage consistent engagement with the course material. At the beginning of classes, we hold a short 10-minute quiz with questions based on the material covered by previous classes and readings. Please arrive on time, late submissions will not be accepted. Each quiz carries a maximum of 10 points.

Paper Presentation and Discussion (20 points): Each student group will deliver one 10-minute presentation on an assigned overview paper, followed by a 10-minute discussion led by the group. The aim is to introduce a specialised topic that complements but cannot be covered fully within the regular lecture sessions. Presentations should identify the paper’s central question, explain its motivation, outline its analytical approach, summarise its main findings, and discuss its principal limitations. The task is not to reproduce the paper in detail, but to make its argument accessible and relevant to the rest of the class. Presentation slides must be sent to the lecturer by e-mail at least two days before class  (armon.rezai@wu.ac.at) and uploaded to Canvas before class.

Applied Group Project and Presentation (50 points): Students will work in groups on an applied case related to biodiversity, ecosystem services, or nature-based solutions, culminating in a final presentation of their analysis and policy recommendations. The project is designed to connect conceptual material from the course to a concrete environmental problem and to develop students’ ability to combine economic reasoning with ecological and institutional considerations. Students will also provide structured feedback to other groups during an interim evaluation session and through participation in the final discussion.

Participation (10 points): Active participation in discussion and group-based class activities is an integral part of the course. Participation is assessed across the semester and reflects both regular attendance and substantive engagement with the material.

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Principles of microeconomics

Appointsments via Email: armon.rezai@wu.ac.at, timothy.foreman@wu.ac.at