Markets for Pollution Permits

Code:

2EGA12

Acronym:

MLE

Keywords
Classification	Keyword
OFICIAL	Management Studies

Instance: 2023/2024 - 2S

Active?	Yes
Responsible unit:	Agrupamento Científico de Economia
Course/CS Responsible:	Master in Environmental Economics and Management

Cycles of Study/Courses

Acronym	No. of Students	Study Plan	Curricular Years	Credits UCN	Credits ECTS	Contact hours	Total Time
EGA	27	Bologna Syllabus since 2012	1	-	7,5	56	202,5

Teaching language

Suitable for English-speaking students
Obs.: Português

Objectives

Together with growing concerns about climate changes, environmental policy instruments capable of combating them became essential. Putting a “price” on carbon, namely through the imposition of taxes and the market of pollution permits, gained new importance in the economic field.

The carbon market, especially in Europe, has become one of the most discussed topics in recent years, target of criticism and successive adjustments, focus of research and publications.

After giving an overview of the antecedents of emissions markets and other political instruments with effects in the same direction, an overview is drawn of several existing pollution markets, their modalities and characteristics, focusing on EU ETS.

Students should be able to evaluate the performance of those markets, according to the objectives for which they were created, and respective operating mechanisms. Through the acquired knowledge, it is intended to give students the necessary skills to analyze, discuss and work in the future with issues related with the European CO₂ market or complementary mechanisms at an international level or in a particular country

Learning outcomes and competences

In this specialization course of the Master in Environmental Economics and Management, the students have access to extensive information about the functioning of emissions markets, particularly CO₂, and their advantages and critical issues. They are encouraged to attend the sessions making their own research and thinking on various central aspects of the subjects taught. Group work carried out throughout the semester and debates on current topics in class, which are largely valued by the course evaluation system, should contribute to this end.

Students must thus, throughout the semester, solidify sufficient knowledge and skills to undertake any research or professional work concerning participation in that market(s) and/or the respective inherent mechanisms, becoming capable of responding to new challenges in these areas.

Working method

Presencial

Program

1. Introduction: Climate change and economy


2. Environmental policy instruments: Paying for carbon emissions through taxes.


3. Other theoretical approaches preceding the application of emission allowance markets


4. Pollution license markets – characteristics, types, functioning. Concrete examples at regional and national level.


5. The international case of the EU ETS (European Union Emissions Trading Scheme).


6. The major international events linked to ETS: The COPs, the Kyoto Protocol, the Paris Agreement.


7. Functioning of EU ETS and price determinants in the carbon market.


8. Current developments.

Mandatory literature

Chaves, C; Costa Pinto, L; Valente, M.; Economia do Ambiente: Conceitos e desenvolvimentos, Almedina, 2023. ISBN: 9789894007418
Pearce, D. W.; Turner, R. K.; Economics of Natural Resources and the Environment, Harvester Wheatsheaf, 1990
Tietenberg, T.H.; Emissions Trading – Principles and Practice, Resources for the Future, , 2006 (2nd ed.)

Complementary Bibliography

Labatt, Sonia; White, Rodney R.; Carbon Finance: the financial implications of climate change, John Wiley & Sons, Inc., Hoboken, New Jersey, 2007
van Kooten, G. Cornelis ; Climate Change Economics: Why International Accords Fail, Edward Elgar Publishing, 2004
United Nations; United Nations Framework Convention On Climate Change, United Nations, 1992
United Nations; Kyoto Protocol To The United Nations Framework Convention On Climate Change, United Nations, 1998
IPCC 2023; Intergovernmental Panel on Climate Change;IPCC Sixth Assessment Report:The AR6 Synthesis Report Climate Change 2023
UN 2015; United Nations, 2015: Paris Agreement to the United Nations Framework Convention on Climate Change, Dec. 12, 2015

Teaching methods and learning activities

The classes consist in a theoretical exposition of the subjects, accompanied by illustrative examples and practical exercises, so fitting the description of theoretical and practical classes.  
If possible, experts from organizations will be invited to show practical application of the subjects

keywords

Social sciences > Economics > Management studies > Environmental management
Natural sciences > Environmental science > Global change > Climate change

Evaluation Type

Distributed evaluation with final exam

Assessment Components

Designation	Weight (%)
Teste	40,00
Trabalho escrito	60,00
Total:	100,00

Amount of time allocated to each course unit

Designation	Time (hours)
Estudo autónomo	116,50
Frequência das aulas	56,00
Trabalho escrito	30,00
Total:	202,50

Eligibility for exams

Requirements:
In the case of continuous assessment, frequency of at least 70% of classes and a minimum of 6 values in test.

Calculation formula of final grade

The assessment components are one test (or various small tests), made individually in the classes, with a weight of 40%, and individual or group projects at home or in the class (with a global weight of 60%).
It is possible to give a bonus till 1,0 value for participation in the classes.
In this evaluation regime, attendance is essential, given that the mini-tests of lesser value, can be carried out without prior notice, in the context of the class and as an extension of the subject taught.

It is also possible to choose the final examination, with the necessary theoretical and practical components to evaluate student performance in the course.

Final grade = Test * (40%) + group and/or individual project(s)* (60%) + class participation (till 1 value)

 

Special assessment (TE, DA, ...)

Special assessment may consist of an oral examination.

Classification improvement

In the case of classification improvement, the projects done throughout the semester will not be taken into account.

Observations

Other references, more specific and adjusted to each case, will be given, accompanying the subjects taught.