Economics II: Economics of Growth and Climate

This course is an introduction into economic growth and development and into the economics of climate change. Climate change and growth are heavily interwoven: on the one hand, economic activity drives greenhouse gas emissions. On the other hand, we will see that climate policy can only sensibly discussed in a framework of long-run economic growth. In addition, using climate change as an example of a long-term large-scale policy challenge to see how policy analysis can make use of the theory of economic growth and to understand the implications of growth for policy. Finally, climate change threatens not only the economy, but human well-being in a much broader sense, ranging from health and safety to biodiversity and environmental amenities; and some pro-growth policies might cause similar damages as well. Any serious evaluation of either pro-growth policies or climate action requires a consistent assessment of these welfare impacts. This is why this course will also discuss welfare concepts and attempts to measure human well-being on the scale of nations. The course will introduce and use three methods that are useful for policy making beyond climate change: regression analysis based on panel data; cost-benefit analysis; and long-term cost-benefit analysis. These tools and techniques can be applied to other long-lasting policy challenges, such as infrastructure investments, biodiversity conservation, public health, or education.

This course is for 1st year MIA and MPP students only.


  • Lion Hirth , Assistant Professor of Governance of Digitalisation and Energy Policy