Course information

The Paris Climate Agreement requires a rapid transformation of key sectors of our economy. This transformation will largely be driven by sector specific policy instruments. The course, taught by DIW researchers Olga Chiappinelli and Jörn Richstein, will focus on the implementation of current climate policies and on how their design can be analyzed and improved using various methods of applied economics. Topics will include issues with current carbon pricing systems such as the EU-ETS, the economic foundations of a climate policy package, and the optimal design of policy instruments complementary to carbon pricing, such as contractual instruments, public procurement, standards and labels, as well as their application in related markets, such as power markets. Instruments of applied microeconomic theory such as game theory, contract theory and behavioral theory, as well as different numerical modelling methods of climate policies and underlying markets, will be applied to understand how the design of climate policy instruments can be robust to issues of asymmetric information and commitment problems, as well as uncertainty and path dependency.