Live Webinar: Economics & Climate Change

The Economics of Climate Change: Externalities and policy response.

When firms make decisions about what, and how much, to produce, they tend to only consider their private costs and benefits, thus maximising their profits. Similarly, when an individual consumes a good, they also focus on their private costs and benefits to maximise their utility. In both cases, their decisions tend to ignore external costs and benefits. For example, if John flies to Rome for a weekend break, he will consider the costs of his flight and accommodation and weighs these up against the benefits he receives from the vacation. However, his decision will not include the externality costs of the carbon emitted while flying and the subsequent impacts of climate change. An externality is thus the cost or benefit that affects a third party who did not choose to incur that cost or benefit. In John’s case, the externality is the climate change impacts of the emitted carbon. Externalities are often the root cause of many environmental problems including climate change.

In this webinar, we will draw on economic theory to discuss: (i) the externality impacts of climate change, and (ii) the national / international policy responses to tackle climate change. Policy responses discussed will include: the Stern Review on the Economics of climate change, the EU Emissions Trading Scheme, and the work of the Intergovernmental Panel on Climate Change (IPCC)

This webinar is targeted to support AS / A (Level 3) Economic specifications, including Market failure, Externalities, Government intervention, Policy instruments and Global economics. This Webinar sets a baseline for the innovative, new BSc Economics and Climate Change degree, which will be offered by Aberystwyth University from September 2020.