Economics is about the meeting of individual and social aspirations and goals, as well as the role played by firms, markets, and institutions. In Environmental Economics, ENE423, we deal with those social goals that are broadly termed "environmental" and in this course, ENE426, we deal with the theory and the practical reality of climate change. We analyze how climate policy affects firms and industries, how governments act, and the space and choice left for individuals and firms.
Four issues which make the challenge of climate change special amongst environmental problems are:
- The intergenerational time horizon in climate change, and how it affects the cost-benefit analysis;
- The diverse interests of countries, and the difficulties in cooperative efforts;
- The political economy and the difficulties of commitment in government;
- Investment and the firm under uncertainty of future climate policy.