Dr Clare Balboni SAL 3.13 and Prof John Van Reenen SAL.2.27A

This course is available on the MRes/PhD in Economics and MRes/PhD in Economics and Management. This course is available with permission as an outside option to students on other programmes where regulations permit.

The course will cover advanced topics in environmental economics where current research is active. It is intended to introduce research students in economics to the latest research in environmental economics and to serve as an input into the research work of these students.

The course will explore literature at the research frontier in three core areas:

• Valuing environmental benefits and harms: valuing benefits; air pollution damages; climate change damages; adaptation; discounting; uncertainty.
• Environmental policy design: environmental policy instruments; cost effective environmental policy; second best environmental policy.
• Innovation, diffusion and the environment: directed technical change; climate change innovation; industrial and place-based policies; diffusion and adoption.

30 hours of lectures in the AT.

This course is delivered through lectures totalling a minimum of 30 hours across Autumn Term. Attendance is compulsory.

Students will discuss papers in lectures.

The course combines theory and empirics and has a strong applied focus. There is no textbook for the course. Students will instead be required to engage with academic papers at the frontier of the literature, as well as with historic seminal works.

The following are examples of some essential readings students can expect to engage with, though the course will evolve with the literature in this field:

• Chay, K.Y. and Greenstone, M., 2005. Does air quality matter? Evidence from the housing market. Journal of political Economy, 113(2), pp.376-424.
• Deryugina, T., Heutel, G., Miller, N.H., Molitor, D. and Reif, J., 2019. The mortality and medical costs of air pollution: Evidence from changes in wind direction. American Economic Review, 109(12), pp.4178-4219.
• Burgess, R., Deschenes, O., Donaldson, D. and Greenstone, M., 2017. Weather, climate change and death in India. University of Chicago, pp.577-617.
• Barreca, A., Clay, K., Deschenes, O., Greenstone, M. and Shapiro, J.S., 2016. Adapting to climate change: The remarkable decline in the US temperature-mortality relationship over the twentieth century. Journal of Political Economy, 124(1), pp.105-159.
• Nordhaus, W.D., 2007. A review of the Stern review on the economics of climate change. Journal of economic literature, 45(3), pp.686-702.
• Borenstein, S., Bushnell, J., Wolak, F.A. and Zaragoza-Watkins, M., 2019. Expecting the unexpected: Emissions uncertainty and environmental market design. American Economic Review, 109(11), pp.3953-3977.
• Carlson, C., Burtraw, D., Cropper, M. and Palmer, K.L., 2000. Sulfur dioxide control by electric utilities: What are the gains from trade?. Journal of political Economy, 108(6), pp.1292-1326.
• Acemoglu, D., Aghion, P., Bursztyn, L. and Hemous, D., 2012. The environment and directed technical change. American economic review, 102(1), pp.131-166.

Problem sets (100%) in the AT.

There will be three assessment exercises in AT.  These assessment exercises may include preparing a research paper proposal, an empirical exercise analysing data, a computation exercise, solving a theoretical exercise, or evaluating a recent unpublished working paper. Each assessment exercise will carry equal weight.