ECON 7221 - The Economics of Climate Change

North Terrace Campus - Winter - 2015

The course provides an understanding of climate change issues, especially the economics of climate change. It provides the tools to assess the relative merits of various climate change policies that will increasingly be put forward by governments and other stakeholders. On completion of this course students should be able to describe and articulate some of the key issues relating to climate change and demonstrate a knowledge of what economics can offer to policies aimed at mitigating its effects. Students should understand the role of economic instruments in designing appropriate climate change policies, the role of the Kyoto Protocol, and the issues of climate change from a developing country perspective. Finally, students should be able to undertake some independent research in the area of economics of climate change mitigation.

  • General Course Information
    Course Details
    Course Code ECON 7221
    Course The Economics of Climate Change
    Coordinating Unit Economics
    Term Winter
    Level Postgraduate Coursework
    Location/s North Terrace Campus
    Units 3
    Contact Up to 3 hours per day for 20 days (Summer Semester). Up to 6 hours per day for 10 days (Winter Semester)
    Available for Study Abroad and Exchange Y
    Assumed Knowledge Introductory Microeconomics & Macroeconomics
    Assessment ? Typically, class participation & presentation; problem-based assignment; 3-hour closed book exam
    Course Staff

    Course Coordinator: Dess Pearson

    Course Coordinator: Professor Paul Kerin

    Course Lecturer: Mr Dess Pearson, Bachelor of Economics (La Trobe University); Graduate Diploma in Public Economic Policy (Australian National University); Master of Management in Industry Strategy (Australian National University); MBA (Edinburgh Business School, UK); Professional Certificate in International Trade (University of Adelaide).

    Contact email address:

    Contact telephone: 0434 360 299
    Course Timetable

    The full timetable of all activities for this course can be accessed from Course Planner.

  • Learning Outcomes
    Course Learning Outcomes

    2.1 COURSE Learning Objectives

    On completion of this course, students should be able to:

    1. articulate key issues relating to climate change;

    2. demonstrate a good understanding of what and how economics can offer public policies aimed at mitigating the effects of climate change;

    3. understand and be able to apply economic instruments in designing appropriate climate change policies;

    4. understand the role of the Kyoto Protocol;

    5. understand the role of energy prices in mitigating the effects of climate change..

    6. understand climate change issues from a developing country perspective;

    7. undertake independent research in the area of the economics of climate change mitigation.

    Particular skills to be developed through undertaking this course include:

    · learning independently and in groups;

    · self-directed research (through the written project and individual/group presentations);

    · working collaboratively in small groups;

    · using the World Wide Web and government agencies to seek relevant information;

    · problem solving; and

    · knowledge building in the field of climate change economics.
    University Graduate Attributes

    This course will provide students with an opportunity to develop the Graduate Attribute(s) specified below:

    University Graduate Attribute Course Learning Outcome(s)
    Knowledge and understanding of the content and techniques of a chosen discipline at advanced levels that are internationally recognised. 1,2
    The ability to locate, analyse, evaluate and synthesise information from a wide variety of sources in a planned and timely manner. 1,2,7
    An ability to apply effective, creative and innovative solutions, both independently and cooperatively, to current and future problems. 7
    Skills of a high order in interpersonal understanding, teamwork and communication. 1
    A proficiency in the appropriate use of contemporary technologies. 1,2,7
    A commitment to continuous learning and the capacity to maintain intellectual curiosity throughout life. 1-7
    A commitment to the highest standards of professional endeavour and the ability to take a leadership role in the community. 1-7
    An awareness of ethical, social and cultural issues within a global context and their importance in the exercise of professional skills and responsibilities. 1-7
  • Learning Resources
    Required Resources

    The following book is required.

    Anthony Owen and Nick Hanley, The Economics of Climate Change, Routledge, London, 2006 (Paperback - ISBN: 978-0-415-40642-0)

    Copies are available at Unibooks.
    Recommended Resources

    The articles and sites provided below are a good starting point for materials relevant to topics covered in this course.

    Baker, R., Barker, A., Johnston, A. and Kohlhaas, M. 2008, The Stern Review: an assessment of its methodology, Productivity Commission Staff Working Paper, Melbourne, January.

    Australian Greenhouse Office, 2005. Australia’s Fourth National Communication on Climate Change,

    Barrett . S (1998) On the Theory and Diplomacy of Environmental Treaty Making, Environmental and Resource Economics 11: 317-333.

    Baumol, WJ and Oates, WE (1988) The Theory of Environmental Policy, 2nd Edition, Cambridge University Press.

    Fisher BS et al (1996) ‘An Economic Assessment of Policy Instruments for Combating Climate Change’, in Economic and Social Dimensions of Climate Change, Cambridge University Press.

    Garnaut Climate Change Review, Final Report available at

    Lutter, R and Shogren, J (2002) ‘Tradable permit traffics: how local air pollution affects carbon emissions permit trading, Land Economics 78: 159-70.

    Productivity Commission (2008), What Role for Policies to Supplement an Emissions Trading Scheme?: Productivity Commission Submission to the Garnaut Climate Change Review, May.

    Productivity Commission (2011), Emission Reduction Policies and Carbon Prices in Key Economies, Commissioned Study, May.

    The Climate Commission (2011), The Critical Decade, Report Prepared by the Climate Commission tasked by the Australian Government to report on policies to mitigate climate change.

    The Garnaut Climate Change Review: Garnaut Review 2011 -

    United Nations, 1992. United Nations Framework Convention on Climate Change,

    United Nations, 1997. Kyoto Protocol to the United Nations Framework Convention on Climate Change,

    World Bank, World Development Report (2010), Development and Climate Change – from the World Bank’s official site –
    Online Learning

    www. - Official site of the United Nations Climate Change Conference in Copenhagen, 5 to 18 December 2009 - The World Bank. - UN Framework Convention on Climate Change. – The Australian Department of Foreign Affairs and Trade. – World Resources Institute. – The Australian Department of Environment. – South Australian Department of Water and Natural Resources. – Australian Bureau of Agricultural and Resource Economics and Sciences. – Professor Barry Brook’s website.

  • Learning & Teaching Activities
    Learning & Teaching Modes
    The primary teaching modes are through lectures and workshops. Learning is expected to take place through writing a comprehensive report that ideally is an equivalent quality to a policy paper or a consultant’s report prepared for clients; through preparing and participating in an oral presentation; through class discussion and through writing under pressure (final exam). All of these modes will prepare students for the rigours of the workplace.

    This course aims to enhance students’ independent learning, research skills and self-directed study, qualities you will need in abundance if you are seeking a career in policymaking, government, NGOs or in international organisations or consultancies. In particular, the course will enhance students’ ability to distil and synthetise information, write succinctly and verbally present facts and findings clearly. The course is thus structured around three elements of assessment – an individual or group oral presentation (20%), a 3,500 word paper on a relevant topic that can be done either individually or as part of a group (30%) and a 3-hour closed book examination (50%). Under no circumstances can groups for either the oral presentation or the written assignment exceed 3 people. Please also note you can work in groups for only one of the modes of assessment – the oral presentation or the written assignment. That is to say, if you work in a group in one mode, the other assessment mode must be done individually. The School of Economics has a policy that does not allow students’ group assessments to be weighted at MORE THAN 30%.

    While the main text book, ‘The Economics of Climate Change’ by Owen and Hanley (2004) and other prescribed reading materials forms the ‘core reading’ of the course, students will be expected to go beyond these if they are to get high grades (that is Distinctions or Higher Distinctions). Further, as students will be working independently, as well as in small groups, the weekly lecture topics and discussion questions should be seen as building blocks and additional knowledge based on students’ own independent research should be added to this.

    The course will be held from Monday 6 July to Thursday 23 July 2015.
    Lectures will be held from 9 am to 1 pm on Wednesdays and Thursdays from 1 pm to 3 pm on
    Workshops will be held on Tuesdays from 1-3 pm.

    The information below is provided as a guide to assist students in engaging appropriately with the course requirements.

    The course requires independent and group learning if it is to be completed successfully. It is anticipated that students will engage in study outside of class time (either individually or in groups) for at least 15 hours a week for the duration of the course, since it is delivered in intensive mode.
    Learning Activities Summary

    Lecture Schedule
    Lecture  1

    Mon 6 July


    Introduction of course and students’ introductions. Climate protection:  what insights can economics offer?  Owen and Hanley, Chapter 1, Introduction to Climate Change issues.

    Theme: big picture introduction of CC issues
    Lecture  2

    Wed 8 July

    9 am-1 pm

    Theme: Designing effective policy instruments; the international architecture and political economy issues.
    Climate protection: O&H, Chapter 4 – a rational framework for assessing climate protection – market failure; measuring costs and benefits and identifying mitigation and adaptation strategies.

    Lecture  3

    Thu 9 July

    9 am to 1 pm

    The Economics of the Kyoto Protocol – O&H Chapter 5 – comment on the Kyoto emissions allocations made to various countries. Comment on the supply of and demand for emissions ‘certificates’.

    The Copenhagen Summit – review various materials from the UNFCCC site with a focus on the actual Copenhagen Accord, and its implications for developed and developing countries.

    Theme:  Global conferences and their impacts on CC

    Agriculture and Climate Change – guest lecture (Prof Randy Stringer from the School of Agriculture).
    Lecture 4

    Mon 13 July

    1 – 3 pm
    Theme: Economic Tools

    The Role of Economic Instruments – O&H Chapter 6 – Carbon Taxes and Emissions Trading.

    Lecture  5

    Wed 15 July

    9 am - 1 pm

    Theme:  Economic Modelling applied to Climate Change

    Economic Modelling of Global Climate Change – O&H Chapter 8. Compare and contrast the various models used to assess the level of carbon taxes needed in 2010 to achieve Kyoto targets.

    Lecture  6

    Thu 16 July

    9am - 1pm

    Theme:  Energy and Climate Change
    The Role of Energy Prices in Global Climate Change- O&H Chapter 9. Comment on the effect of fossil fuel and electricity subsidies on climate change.

    Renewable Energy – O&H Chapter 12.  Will clean technologies and renewable energy have an impact on reducing GHG emissions? And by how much?

    Lecture  7

    Mon 20 July

    1 – 3 pm

    Theme:  Developing Countries and Climate Change

    Developing countries and Climate Change – O&H Chapter 11. Should developing countries bear a disproportionate burden of climate change mitigation policies? And how effective is the clean development mechanism (CDM) in addressing imbalances between the developed and developing countries?


    Wed 22 July

    9am – 1 pm

    Student Presentations (Assessable)

    Thu 23 July

    9am – 1 pm
    Student Presentations (Assessable)
    Workshop Themes and topics

    Tue 7 July

    1-3 pm

    Formation of groups and Developing Plans for the

    Presentation Topics.

    Discussion and Plan for: The Kyoto Protocol

    Tue 14 July

    2 -3 pm

    The Copenhagen Conference and the Role of Developing Countries

    Tue 21 July

    1 -2 pm

    Electricity Subsidies and the Role of LDCs Agriculture and Climate Change

    Specific Course Requirements
  • Assessment

    The University's policy on Assessment for Coursework Programs is based on the following four principles:

    1. Assessment must encourage and reinforce learning.
    2. Assessment must enable robust and fair judgements about student performance.
    3. Assessment practices must be fair and equitable to students and give them the opportunity to demonstrate what they have learned.
    4. Assessment must maintain academic standards.

    Assessment Summary
    The University’s policy on Assessment for Coursework Programs is based on the following five principles: 1) assessment must encourage and reinforce learning; 2) assessment must measure achievement of the stated learning objectives; 3) assessment must enable robust and fair judgements about student performance; 4) assessment practices must be fair and equitable to students and give them the opportunity to demonstrate what they have learned; and 5) assessment must maintain academic standards
    (see: )

    This course’s assessment encourages and reinforces learning and measures achievement of the stated learning objectives by evaluating (a) class discussion (clarifying and initiating ideas); (b) group cooperation and learning (through the oral presentation and written paper); critical thinking and analysis (written assignment) and working under pressure (exam). The relative weights reflect the importance of each of the assessment modes. The assessment practices are fair and equitable as students have the choice of either working individually or in small groups.
    Assessment Related Requirements

    Oral Presentation Weighting: 20%
    Due Dates: 22 and 23 July
    15-20 minute presentation (individual or group) followed by
    questions and answers.

    Problem-Based Assignment Weighting: 30%
    Submission Date: Fri 31 July: 4 pm

    No more than 3,500 words (individual or group)

    3 hr Closed Book Examination Weighting: 50%
    Date: To be advised



    Assessment Detail
    Oral Presentation (20%)

    An important part of the assessment will include the individual or group (2 to 3 people)
    presentation by students on the topic of their choice; this presentation will account for 20% of the total grade. Students can choose their own topics that are based on the lectures, though these are
    subject to approval by the lecturer. Otherwise the presentation topics are identical to the 4 topics that are set for the problem based written assignment, representing a good opportunity for students to orally discuss the issues and then write them up for the 30% written assignment. Students can do the same topic for both the presentation and written assignment or they can do a separate topic for each.

    Again, if you are working in a group for the presentation, be aware that you cannot also work in a group for the written assignment. Students MUST nominate their topics for both the presentation and the written assignment shortly after commencement of the course.

    Problem Based Written Assignment (30%)

    Four questions are set, of which you are to choose one, which will be based on your individual and/or group research. Note, if you choose to work in group for the oral presentation, you
    cannot work in a group for the written assignment and that groups cannot exceed
    3 people.

    The written assignment requires you to:

    Submit a paper (in the form of a report) of 3,500 words (maximum).

    As this is to be in the form of a formal report submitted to decision makers, please follow the format of a formal submission; that is, you are required to follow a logical structure that includes an introduction, a review of the literature, the main issues, discussion (including any analysis), key findings and recommendations. You are also to include a one or two paragraph ‘Executive Summary’ highlighting your key points, findings and recommendations. Note: neither the Executive Summary nor the Reference List will be included in the word count.

    You MUST follow the above format; students that do not will be marked down.

    Assessment criteria for the paper will include how professionally written the report is (that is, it should be - free from error, logical, provide evidence of wide reading/research, accurate, provide evidence of good summation skills and demonstrate good quality English writing). Additional criteria will include how well the paper is researched; how well integrated are the appropriate economic concepts and models; how clearly and concisely the relevant issues and problems are discussed and the quality of your findings and recommendations.

    Final Examination (50%)

    The final examination will comprise 5-6 essay-type questions based entirely on the topics covered in lectures, of which you are to answer 4 questions. One question may be compulsory. Each question carries equal weight of 25%.

    The final exam will count for 50% of the final grade.

    Your final grade will be determined by either of the following (whichever is the

    1. A weighted average of the marks obtained from the oral presentation (20%), the written paper (30%) and the final examination (50%).

    2. Your final examination grade.

    If you obtain a grade of between 45% and 50% (either weighted average across all modes of assessments or the final
    exam on its own) or if medical or exceptional circumstances prevail, you may be entitled to sit for a supplementary examination.

    You will be advised when and where the final examination will be held.

    Please note the date for submission of your written assignment is 4:00 pm on Friday 31 July 2015.   Penalties for late submission will apply, with 5% deducted for each day overdue.  Submissions are to be placed in the assignment drop box on the ground floor, University of Adelaide, 10 Pulteney St, (Nexus 10 building), or alternatively you could email your written assignment to me at:

    Course Grading

    Grades for your performance in this course will be awarded in accordance with the following scheme:

    M10 (Coursework Mark Scheme)
    Grade Mark Description
    FNS   Fail No Submission
    F 1-49 Fail
    P 50-64 Pass
    C 65-74 Credit
    D 75-84 Distinction
    HD 85-100 High Distinction
    CN   Continuing
    NFE   No Formal Examination
    RP   Result Pending

    Further details of the grades/results can be obtained from Examinations.

    Grade Descriptors are available which provide a general guide to the standard of work that is expected at each grade level. More information at Assessment for Coursework Programs.

    Final results for this course will be made available through Access Adelaide.

    Additional Assessment
    If a student receives 45-49 for their final mark for the course they will automatically be granted an additional assessment. This will most likely be in the form of a new exam (Additional Assessment) and will have the same weight as the original exam unless an alternative requirement (for example a hurdle requirement) is stated in this semester’s Course Outline. If, after replacing the original exam mark with the new exam mark, it is calculated that the student has passed the course, they will receive 50 Pass as their final result for the course (no higher) but if the calculation totals less than 50, their grade will be Fail and the higher of the original mark or the mark following the Additional Assessment will be recorded as the final result.
  • Student Feedback

    The University places a high priority on approaches to learning and teaching that enhance the student experience. Feedback is sought from students in a variety of ways including on-going engagement with staff, the use of online discussion boards and the use of Student Experience of Learning and Teaching (SELT) surveys as well as GOS surveys and Program reviews.

    SELTs are an important source of information to inform individual teaching practice, decisions about teaching duties, and course and program curriculum design. They enable the University to assess how effectively its learning environments and teaching practices facilitate student engagement and learning outcomes. Under the current SELT Policy ( course SELTs are mandated and must be conducted at the conclusion of each term/semester/trimester for every course offering. Feedback on issues raised through course SELT surveys is made available to enrolled students through various resources (e.g. MyUni). In addition aggregated course SELT data is available.

  • Student Support
  • Policies & Guidelines
  • Fraud Awareness

    Students are reminded that in order to maintain the academic integrity of all programs and courses, the university has a zero-tolerance approach to students offering money or significant value goods or services to any staff member who is involved in their teaching or assessment. Students offering lecturers or tutors or professional staff anything more than a small token of appreciation is totally unacceptable, in any circumstances. Staff members are obliged to report all such incidents to their supervisor/manager, who will refer them for action under the university's student’s disciplinary procedures.

The University of Adelaide is committed to regular reviews of the courses and programs it offers to students. The University of Adelaide therefore reserves the right to discontinue or vary programs and courses without notice. Please read the important information contained in the disclaimer.