Economics of Climate Change
This course provides a deep dive into the economic dimensions of climate change, exploring both theoretical foundations and real-world applications.
Created by —
Terra.do
Created by the Terra.do learning team and overseen by the Climate Fellowship editorial group and the Academic Advisory Board.
Introductory level
No prior economics knowledge is required, but an interest in climate policy and sustainability is desirable
Flexible schedule
Learn according to your schedule with fully asynchronous learning
Foundational
Build foundational knowledge about climate change and climate science
1 week ~ 3-4 hours
Expected commitment. We will help keep yourself accountable with timely check-ins
Course overview
This course offers a comprehensive exploration of the economic principles that underpin climate change and policy responses. Beginning with foundational economic concepts such as supply and demand and the role of markets, we will analyze how climate change represents a market failure and discuss the implications of environmental economics, including the tragedy of the commons.
Moving beyond theory, the course will dive into key policy mechanisms for addressing climate change, with a particular focus on carbon pricing strategies. We will examine different carbon pricing schemes, including the European Union Emissions Trading System (EU ETS) and corporate carbon pricing models. Through this lens, we will assess how businesses, governments, and international bodies are leveraging market-based approaches to drive emissions reductions.
The course will also critically engage with carbon markets, exploring both their potential and their limitations. We will analyze critiques of carbon pricing, the broader implications for climate justice, and the concept of the social cost of carbon as a tool for decision-making. By the end of this course, you will will develop a well-rounded understanding of climate economics, equipping them with the knowledge to critically assess market-based solutions and advocate for effective, equitable climate policies.
Skills you will learn
Navigate Climate Disclosures
Learn to decipher mandatory and voluntary climate disclosures worldwide, with a focus on newly passed EU and California legislation
Understand TCFD Recommendations
Gain insight into the Task Force on Climate-Related Financial Disclosures (TCFD) framework, a cornerstone of global corporate climate reporting
Assess Materiality
Determine which climate-related data is financially and environmentally material to a company and how it influences decision-making
Comprehend Integrated Reporting
Understand how to integrate climate data into financial reporting and align with emerging global sustainability standards
Who is this course for?
Sustainability professionals
Prepare for the growing wave of climate regulations that will shape corporate sustainability strategies.
Investment analysts
Learn how to leverage climate-related financial disclosures for risk analysis and investment decision-making.
Financial reporting professionals
Build a strong foundation in sustainability reporting and understand its key distinctions from traditional financial reporting.
Newly appointed ESG controllers
Gain the expertise to bridge the gap between sustainability and finance, ensuring compliance with evolving ESG reporting frameworks.
Course syllabus
The Law of Supply and Demand
Understanding the law of supply and demand is fundamental to economics. This section introduces the core principles that govern market behavior, laying the groundwork for analyzing economic interventions in climate policy.
Climate Change as Market Failure
Climate change exemplifies a market failure, where the costs of environmental damage are not reflected in market prices. This section explores externalities and inefficiencies that prevent free markets from addressing climate change effectively.
Policy Options for Climate Change
Governments have various policy instruments to correct market failures, ranging from regulatory measures to market-based mechanisms. This section examines how policy interventions can drive climate action
Carbon Pricing
One of the most widely used market-based approaches to reducing emissions is carbon pricing. This section explores the rationale for pricing carbon and the mechanisms that make it work in theory and practice.
Carbon Pricing Schemes
Carbon pricing takes multiple forms, including carbon taxes and cap-and-trade systems. This section provides an overview of different schemes implemented worldwide and their effectiveness.
The EU Emissions Trading System (EU ETS)
The EU ETS is the world’s largest carbon pricing program. This case study examines its structure, challenges, and impact on emissions reductions.
Corporate Carbon Pricing
Beyond government-led initiatives, corporations are implementing internal carbon pricing to align their business models with sustainability goals. This section explores corporate strategies and case studies.
Critiques of Carbon Markets
While carbon markets are designed to reduce emissions efficiently, they are not without limitations. This section analyzes common criticisms, including price volatility, equity concerns, and effectiveness in driving real reductions.
The Social Cost of Carbon
This final quiz assesses your understanding of carbon market limitations and the role of the social cost of carbon in policy development.
You won't learn alone
Join monthly live office hours with the course creator and fellow learners.
- Ask your questions live
- Get direct feedback from the instructor
- Connect with peers taking the course with you
- Learn from others' questions
- Get access to the recording if you miss it
- Keep lifetime access
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Meet the course creator
Terra.do
Created by the Terra.do learning team and overseen by the Climate Fellowship editorial group and the Academic Advisory Board.
Terra.do is a global climate learning and careers platform dedicated to equipping professionals with the knowledge and skills needed to drive climate action. Through expert-led courses, interactive learning experiences, and a vibrant community, Terra.do empowers individuals across industries to transition into and thrive in climate-focused roles. With a mission to get 100 million people working on climate solutions, the platform connects learners with real-world opportunities in sustainability, policy, climate finance, and beyond.
We collaborate with industry experts, practitioners, and organizations to deliver high-impact programs covering key climate topics. Whether through deep-dive fellowships, specialized courses, or our extensive climate job board, we serve as a trusted resource for professionals seeking to make a meaningful impact in the fight against climate change.
Learn the skills and find the community to work on climate
Take expert-led courses, join a global network, and work on real climate solutions.
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