Programa especializado: Climate Change and Sustainable Investing

Global warming is one of the most significant challenges of the century and tackling it in the most effective way requires a good understanding of its physical, social and financial aspects. The Science and Engineering of Climate Change course offers an introduction to the science of climate change and to the existing technologies to mitigate its effects.

Are we sure that the climate is changing? How confident are we that climate change is anthropogenic? Are we heading for a climate catastrophe? Why are greenhouse gases associated with global warming? What options do we have to cope with these facts? Which of the many proposals are realistic, and which are just wishful thinking? By the end of this course, you will have the necessary conceptual tools to provide your own answers to these questions. This MOOC is divided into four modules. With the first two you will understand how scientists measure climate and its evolution, how climate models work and how greenhouse gases within the atmosphere play a central role in determining the climate. The last two modules introduce the main technologies that can be used to reduce carbon emissions and carbon concentration in the atmosphere, and, in the light of the facts explained in the first part of the course, explain how these technologies can be best combined. The MOOC is for those who want to understand not only the basics of climate-change science, but also what we can really and effectively do to curb the present trend in the planet’s temperatures. No previous knowledge is required.

Being aware of the urgency and importance of climate change is not enough to tackle it effectively. To avoid the worst climate outcomes, decisive action has to be taken. But what realistic options do we have? Since our resources are limited, is it better to act now or wait until we have more advanced and less expensive technology? How big do our abatement efforts have to be?

This MOOC will help you understand how economists try to answer these questions and find the optimal course of action. Most important, it will give you the conceptual tools to draw your own conclusions. In the first part of the MOOC, you will learn about the two main approaches used by economists to determine when and how much we should invest in the fight against climate change. The first method is the net-present-value approach. Here the social discount rate plays a central role in determining optimal policy, by showing how future benefits and costs can be compared and made comparable (‘present-valued’) with expenditures today. In the second approach you will learn how Integrated Assessment Models (IAMs) work. In particular, you will study in detail the strengths and weaknesses of one of the most popular IAMs, the DICE model, developed by Nobel laureate Professor Nordhaus. This model tries to figure out the optimal course of action by providing a simplified account of the science, the technology and the economics of the problem. The second part of this MOOC then explores the different types of economic policies that decision-makers can adopt. You will be introduced to different methods used to control emissions, such as carbon taxes, regulations and standard-setting. You will also learn about the most developed emissions trading markets around the world and their effects on the economy. This MOOC is for those who wish to understand the economics of climate change and use this understanding to form their own informed opinion about the policies on which we can rely to tackle it. It is not necessary to have specialized prior knowledge, apart from basic familiarity with economic concepts such as utility functions. We do suggest, however, taking the first MOOC of this specialization before starting this one in order to gain a simple but solid understanding of the physical and technological aspects of the problems.

The urgent transition towards a low-carbon economy will profoundly change our economy. Households, companies and financial intermediaries have to be ready in order to avoid the downside risks and seize the opportunities created by climate change. The Finance of Climate Change MOOC will explain (i) how climate change and the policies aimed to mitigate it will impact the different businesses and (ii) the means and tools at the disposal of companies, banks and investors to be part of this transition.

What is the shadow price of carbon? What makes a bond green? How can investors steer the decarbonization of a company? How can we make sure that a company is making real efforts to make its business model climate-resilient and not just greenwashing? These are some of the questions that will be addressed in this MOOC. This MOOC covers the financial risks and opportunities of climate change and how companies can finance their green transition, for example by issuing green securities. You will also learn how financial intermediaries address climate change risks and why central banks are concerned about climate change. This MOOC is for those who wish to understand the finance of climate. It is not necessary to have specialized prior knowledge, apart from basic familiarity with accounting and financial concepts such as discounted cash flows. We do suggest, however, taking the first and second MOOC of this specialization before starting this one in order to gain a simple but solid understanding of the science and economics aspects of climatic changes.