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DRPS : Course Catalogue : Business School : Common Courses (Management School)

Postgraduate Course: Carbon Pricing (CMSE11486)

Course Outline
SchoolBusiness School CollegeCollege of Arts, Humanities and Social Sciences
Credit level (Normal year taken)SCQF Level 11 (Postgraduate) AvailabilityNot available to visiting students
SCQF Credits10 ECTS Credits5
SummaryThe course aims to provide students with an understanding of the economic theory and practice relevant to the design and implementation of carbon pricing and related policies. Topics covered will include core economic theory of instrument choice and efficient regulation of externalities, the economics of carbon markets, e.g. emissions trading, and other instruments, and the practice of implementing and reforming carbon pricing schemes. Students will come away from the course with an in-depth understanding of the functioning of carbon pricing, and the skills to assess its impact on society and businesses.
Course description The course provides a foundation in economic theory for carbon pricing, and a detailed understanding of the design and implementation of carbon pricing policies. The course provides the theoretical knowledge for designing textbook carbon pricing schemes, e.g. emissions trading and carbon taxes, and develops practical knowledge for addressing teething issues and the required market management solutions.

The course provides an overview of the economic theory underpinning the main policy instruments explored in other courses. In particular, the course introduces concepts, institutional provisions and market design elements relevant for the Carbon Accounting and Climate Policy courses. The course also complements the Climate Policy and Sustainable Finance courses by exploring carbon management strategies and market behaviour.

Outline Content

1. Market failures, externalities and the Coase Theorem
2. The theory of carbon pricing - carbon taxes and carbon markets
3. The theory of carbon pricing - institutional topics in cap-and-trade
4. The practice of carbon pricing - problems and solutions
5. International carbon markets and the future of carbon pricing
6. Modelling carbon prices and market behaviour
7. Managing carbon risk - industry perspective

Student Learning Experience

The course includes guest speakers, either in person or via Skype. This provides useful real-world insights alongside the more theoretical aspects of the course.

The course will be taught through weekly lectures and will generally include a case study or other interactive discussion component.
Entry Requirements (not applicable to Visiting Students)
Pre-requisites Co-requisites
Prohibited Combinations Other requirements None
Course Delivery Information
Academic year 2020/21, Not available to visiting students (SS1) Quota:  None
Course Start Block 2 (Sem 1)
Timetable Timetable
Learning and Teaching activities (Further Info) Total Hours: 100 ( Lecture Hours 10, Seminar/Tutorial Hours 5, Formative Assessment Hours 10, Summative Assessment Hours 35, Programme Level Learning and Teaching Hours 2, Directed Learning and Independent Learning Hours 38 )
Assessment (Further Info) Written Exam 0 %, Coursework 100 %, Practical Exam 0 %
Additional Information (Assessment) Essay (Individual) 100% Assesses LO1-3
Feedback Formative verbal feedback will be provided to the students each week during lectures/discussion sessions. Feedback will be provided by the Course Organiser, and also by peers within the class. Feedback will also be given on the summative assignments.
No Exam Information
Learning Outcomes
On completion of this course, the student will be able to:
  1. Describe and critically evaluate the design of existing and proposed carbon pricing schemes.
  2. Critically evaluate alternative strategies for participants of carbon pricing schemes.
  3. Describe the likely future trends in carbon pricing development.
Reading List
Indicative Reading List

Kolstad, C.D. (2010) 'Environmental Economics', Oxford University Press.

Phaneuf, D.J. and Requate T. (2017) 'A Course in Environmental Economics: Theory, Policy and Practice', Cambridge University Press.

Goulder L.H. and Parry I. (2008) `Instrument Choice in Environmental Policy', Review of Environmental Economics and Policy, 2 (2), pp. 152-174.

Schamalensee, R. and Stavins, R. (2017) 'The Design of Environmental Markets: What have we Learned from Experience with Cap and Trade', Oxford Review of Economic Policy, 33(4), pp. 572-588.

Stavins, R. (2015). 'Linkage of Regional, National, and Sub-National Policies in a Future International Climate Agreement', in Toards a Workable and Effecive Climate Regime, 283-296, UK Center for Economic Policy Research.

Additional Information
Graduate Attributes and Skills Knowledge and Understanding

After completing this course, students should have:
- An understanding of the key theories and concepts associated with carbon pricing.
- A critical knowledge and understanding of the main advantages and disadvantages of carbon taxes and carbon markets.
- An understanding of carbon markets design issues and existing implemented solutions.
- An understanding of carbon management strategies and market behaviour.

Practice: Applied Knowledge, Skills and Understanding

After completing this course, students should be able to:
- Critically evaluate alternative policy design elements and appraise different carbon pricing schemes.
- Critically evaluate design issues and proposed alternative solutions.
- Think analytically about the financial and strategic implications of carbon markets for business.

Cognitive Skills

After completing this course, students should be able to:
- Critically evaluate and synthesize new and complex ideas.
- Offer creative solutions and insights on complex issues.

Communication, ICT, and Numeracy Skills

After completing this course, students should be able to:
- Comprehend, speak and write the language of carbon pricing.
- Communicate technical, conceptual and critical information clearly and concisely.

Autonomy, Accountability and Working with Others

After completing this course, students should be able to:
- Provide and receive peer-feedback.
- Cooperate with others from different professional, educational and cultural backgrounds.
KeywordsNot entered
Course organiserDr Luca Taschini
Course secretaryMs Rhiannon Pilkington
Tel: (0131 6)50 8072
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