This PSE summer school introduces participants to cutting-edge research on the topic and familiarizes them with the relevant methods to analyze (econometric analysis, dynamic modelling).The objective of the course is to equip the participants with the background and tools that are needed to contribute to this dynamic field in terms of research and policy design and evaluation.
The main questions we cover are the following. How do we measure the impacts of climate change on economic outcomes? What are the relevant economic instruments to combat climate change in a globalized world? How can migration and trade help countries and individuals mitigate the impacts of climate change and/or disasters? How do lobbying and information acquisition influence the actual climate policies?
- Climate Change and Migration - Katrin Millock and Giovanni Peri, joint with the migration program
- The Macroeconomics of Climate Change - Katheline Schubert
- Lobbying and private politics - Mireille Chiroleu-Assouline
- The effects of trade, the EU ETS, and natural disasters on manufacturing firms - Hélène Ollivier
- Geocoded data for Environmental Economists - François Libois
Workshop: present your paper
Participants will have the opportunity to submit a paper to be presented within this programme. Selected papers will be presented in front of participants and faculty in slots reserved for such presentations.
Migration and Climate Change – Katrin Millock and Giovanni Peri
(joint with the Migration Program)
This course, which is joint with the Climate Change program, aims at understanding the economic impacts of climate change, with a focus on one particular form of adaptation to climate change: migration.
The course will focus on the measures of climate change and weather variations and the main econometric methods that are used to capture their influence on migration. We will study theoretical models that depart from standard models of migration decisions by including temperature shocks as a parameter. The spectrum of models covered will include the random utility model and its empirical counterpart (the gravity model), and general equilibrium models. We will also review the literature on empirical estimates: what do the empirical studies predict? We will discuss the recent approaches to better model the mechanisms underlying this specific form of adaptation, and the relation of migration to other adaptation strategies.
The course thus intends to give participants a thorough understanding of the methods used, their assumptions, and challenges
- How do we measure climate change impacts using weather data? A review of empirical methods to estimate the influence of climate change on migration - Katrin Millock, 1.5 hours
- Analyzing the effects of climate change on migration: theory and empirical identification. Focus on international migration (across countries) and internal rural-urban migration – Giovanni Peri, 3 hours
- Who are the climate migrants and why do they migrate? Modelling of forced migration, underlying mechanisms, and in situ adaptation choices – Katrin Millock, 1.5 hours
Selected key references
- Beine M., Parsons, C. (2015), “Climatic factors as determinants of international migration.” The Scandinavian Journal of Economics 117(2): 723-767.
- Bohra-Mishra P, Oppenheimer, M., Hsiang, S. (2014), “Nonlinear permanent migration response to climatic variations but minimal response to disasters.” Proceedings of the National Academy of Sciences 111: 9780-9785.
- Cattaneo, C., Beine, M., Fröhlich, C., Kniveton, D., Martinez-Zarzoso, I., Mastrorillo, M., Millock, K., Piguet, E., Schraven, B. (2019). “Human Migration in an Era of Climate Change.” Review of Environmental Economics and Policy 13(2): 189-206.
- Cattaneo, C., Peri, G. (2016) “The migration response to increasing temperatures.” Journal of Development Economics 122(C): 127-146.
- Hornbeck, R. (2020), “Dust Bowl Migrants: Identifying an Archetype.” NBER Working Papers 27656.
- Millock, K. (2015), “Migration and Environment.” Annual Review of Resource Economics 7.
- Peri, G., Sasahara, A., (2019). “The Impact of Global Warming on Rural-Urban Migrations: Evidence from Global Big Data.” NBER Working Papers 25728.
- Peri, G., Rury, D., Wiltshire, J.C., (2020). “The Economic Impact of Migrants from Hurricane Maria.” IZA Discussion Papers 13049, Institute of Labor Economics (IZA).
- de Sherbinin, A., (2020). “Impacts of Climate Change as Drivers of Migration”. Migration Policy Institute Feature.
The Macroeconomics of Climate Change - Katheline Schubert
We will discuss climate change in the perspective of macroeconomic modeling and quantitative evaluation. We present the building blocks of top-down Integrated Assessment Models (IAMs) and discuss the central questions the modeler has to address (discounting, damages, uncertainty, non-linearities, tipping points etc.). We conclude with a presentation of the DICE model and a discussion about the timing of climate policy and the social cost of carbon.
- Climate change: the natural-science background
- Global economy-climate models
- The DICE model and beyond
Selected key references
- Hassler, J., Krussel, P. and Smith, A.A. (2016). “Environmental macroeconomics: the case of climate change.” Chapter 24 in Handbook of Macroeconomics, vol. 2B, Elsevier.
- Hsiang, S. and Kopp, R.E. (2018). “An Economist’s Guide to Climate Change Science.” Journal of Economic Perspectives, 32(4), 3–32.
- Heal, G. (2017). “The economics of the climate.” Journal of Economic Literature, 55(3), 1046–1063.
- Nordhaus, W.D. (2018). “Projections and Uncertainties about Climate Change in an Era of Minimal Climate Policies.” American Economic Journal: Economic Policy, 10(3), 333–360.
Lobbying and private politics - Mireille Chiroleu-Assouline
The objective of this course is to analyse the political economy constraints related to the adoption and implementation of climate change mitigation policies. It will focus on the competition between companies and green NGOs to influence individuals and public decision-makers by providing them with information, whether science-based or biased. The course will explore in depth how the interaction of activist pressure and firms’ lobbying has an impact on international negotiations and environmental regulation.
- Awareness campaigns and information warfare
- Political influence in international climate negotiations
- Lobbying by interest groups and environmental regulation
Selected key references
- Chiroleu-Assouline, M., Lyon, T. P. (2020). Merchants of Doubt: Corporate Political Action when NGO Credibility is Uncertain. Journal of Economics, Management and Strategy, 29(2), 439-461.
- Marchiori, C., Dietz, S., Tavoni, A. (2017). Domestic politics and the formation of international environmental agreements. Journal of Environmental Economics and Management, 81, 115-131.
- Meng, K. and Rode, A. (2019). The social cost of lobbying over climate policy. Nature Climate Change 9, p. 472-476.
- Yu, Z. (2005). Environmental protection: A theory of direct and indirect competition for political influence. The Review of Economic Studies, 72(1), 269-286.
The effects of trade, the EU ETS, and natural disasters on manufacturing firms - Hélène Ollivier
This course will cover the latest research on trade and the environment, as well as on the effects of the EU ETS and natural disasters on manufacturing firms. We will focus on ex post analysis of trade and policy impacts on firm-level economic and environmental outcomes. We will study how manufacturing firms respond to trade opportunities or competition from abroad, with an emphasis on their decisions that have consequences in terms of CO2 emissions or other pollutants. We will also study the effects of the EU ETS on heterogeneous firms, taking into consideration the facts that the environmental regulation does not cover all manufacturing facilities within the EU countries and that very few countries outside of the EU implemented a similar carbon regulation. Finally, we will study the propagation of the effects of natural disasters through firms’ networks.
- Trade and firm-level emissions
- The impacts of the EU ETS on manufacturing firms
- The disruptive power of natural disasters on trade networks
Selected key references
- Cherniwchan J., B. Copeland and S. Taylor (2017). “Trade and the Environment: New Methods, Measurements, and Results”, Annual Review of Economics, vol. 9, 59-85.
- Barrows, G. and H. Ollivier (2021), “Foreign demand, developing country exports, and CO2 emissions: Firm-level evidence from India”, Journal of Development Economics, in press.
- Barrows, G. and H. Ollivier (2018), “Cleaner Firms or Cleaner Products? How Product Mix Shapes Emission Intensity from Manufacturing”, Journal of Environmental Economics and Management, vol. 88, 134-158.
- Shapiro, J. and R. Walker (2018). “Why is Pollution from US Manufacturing Declining? The Roles of Environmental Regulation, Productivity, and Trade”, American Economic Review, vol. 108(12), 3814-54.
- Martin, R., M. Muûls, and U.J. Wagner (2015). “The impact of the European Union Emissions Trading Scheme on regulated firms: What is the evidence after ten years?”, REEP, vol. 10(1), 1-21.
- Carvalho, V., M. Nirei, Y. Saito and A. Tahbaz-Salehi (2016). “Supply chain disruptions: Evidence from the Great East Japan Earthquake”, Working Paper
Geocoded data for Environmental Economists - François Libois
This course will focus on the basic and intermediate requirements that researchers in Environmental Economics have to master when using geocoded data in their work. Data sources include remote sensing information as well as data originating from paper maps of geocoded records.
We will essentially focus on measurement issues and see how choices made in the early steps of the research projects impact the whole research process. The course is very much constructed as a “tricks and tools” to reduce the entry cost in geocoded data and introduce students to Geographical Information System software, namely QGIS, in interaction with statistical software (STATA) and programming language (PYTHON). The course includes many examples from recently published papers, especially on drivers of deforestation, recent trends in agriculture, and tracking of pollution. Participants will get some exercise material to practice around the lectures.
- Why Geocoded data?
- Issues related to the choice of projection systems
- Measurement issues: pro and cons of (some) remote sensing data, aggregation issues
- Combining geocoded data with socio-economic data
Selected key references
- Masaoki Kudamatsu, 2018, GIS for Credible Identification Strategies in Economics Research CESifo Economic Studies, 64(2), pp. 327-338
- Dave Donaldson & Adam Storeygard, 2016. “The View from Above: Applications of Satellite Data in Economics,” Journal of Economic Perspectives, American Economic Association, vol. 30(4), pages 171-198, Fall.
- Melissa Dell, 2009, GIS analysis for applied economists- Unpublished manuscript, MIT Department of Economics
Contents - Climate Change