Climate Risk, Finance, and Market Mechanisms Study Guide
This guide covers climate risk management and finance, detailing market mechanisms such as green bonds, weather derivatives, and carbon offsets. It examines the three primary climate risk channels (physical, transition, liability) and their impact on financial stability, alongside empirical evidence and policy design for offset markets.
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Environmental Economics Midterm Study Guide
Environmental Economics Fundamentals
An overview of environmental economics covering market failures, property rights, policy, and collective action.
- Scarcity
- Trade-offs
- Opportunity cost
- Marginal thinking
- Incentives
- Market failure
- Externalities
- Public goods
- Common-pool resources
- Information asymmetry
- Property rights
- Transaction costs
Measuring Environmental Benefits and Costs
This module covers econometrics, environmental informatics, discounting, cost-benefit analysis, and methods for valuing environmental goods including travel cost, contingent valuation, and hedonic pricing.
- Omitted variable bias (OVB)
- Geographic Information Systems (GIS)
- Remote sensing
- Discounting
- Net present value (NPV)
- Willingness to Pay (WTP)
- Willingness to Accept (WTA)
- Total Economic Value
- Revealed preference
- Stated preference
- Travel Cost Method (TCM)
- Contingent Valuation Method (CVM)
- Hypothetical bias
- Protest zeros
- Implicit price
Assignment 1: Consumer Surplus and Negative Externalities
Consumer Surplus and Negative Externalities
An assignment covering consumer surplus, market equilibrium, and negative externalities using PMC, PMB, and SMC terminology.
- Consumer surplus
- Market equilibrium
- Negative externalities
- Private marginal cost (PMC)
- Private marginal benefit (PMB)
- Social marginal cost (SMC)
- Socially optimal quantity
Analytical Foundations and Externalities Policy
Externalities, Taxes, and Abatement Subsidies
An assignment covering marginal reasoning, negative externalities, deadweight loss, emission taxes, and abatement subsidies.
- marginal benefits
- marginal costs
- total surplus
- supply–demand diagram
- negative externalities
- deadweight loss
- socially optimal quantity
- marginal abatement cost
- marginal damage
- emission taxes
- abatement subsidies
- total compliance cost
- fiscal cost
- long-run entry and exit margin
Implicit Prices, VSL, and Behavioral Economics
Implicit Prices, Value of a Statistical Life, and Behavioral Economics
This guide covers implicit prices in housing markets, Value of a Statistical Life calculations, and behavioral economics foundations.
- Implicit price of improved clarity
- Marginal WTP
- Superfund cleanups and housing prices
- Sea Level Rise capitalization
- Value of a Statistical Life (VSL)
- Hedonic wage approach
- Benefit-cost analyses
- Bounded rationality
- Loss aversion
- Framing effects
- Heuristics and biases
Implicit Prices, Value of a Statistical Life, and Behavioral Economics
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Fundamentals of Environmental Economics and Policy
Environmental Policy Instruments and Discounting
Comparing standards and taxes while applying discounting to environmental projects and cost–benefit analysis.
- Standards vs. Taxes
- Cost-effectiveness
- Equimarginal principle
- Policy control over emissions
- Price and quantity uncertainty
- Discounting
- Time preference
- Opportunity cost of capital
- Cost–Benefit Analysis
Comparing SMC and PMC Quantities
SMC and PMC Market Quantity Comparison
A comparison of how SMC differs from PMC regarding private market quantity and socially optimal quantity.
- SMC
- PMC
- private market quantity
- socially optimal quantity
Climate Damages, Global Externalities, and Discounting
Climate Damages and Global Externalities
An assignment exploring climate change as a global negative externality using economic terminology such as PMC, SMC, and social marginal damage.
- negative externality
- private marginal cost (PMC)
- social marginal cost (SMC)
- social marginal damage (SMD)
- deadweight loss (DWL)
- discounting
- climate–growth regressions
- IAM damage functions
- omitted variable bias
- adaptation assumptions
Climate Risk, Finance, and Market Mechanisms
Climate Finance and Risk Management
Financial markets price and manage climate risk through policy design for offset markets, climate finance tools, and weather derivatives.
- Policy Design for Offset Markets
- Climate Finance
- Green bonds
- Climate risk disclosure
- Carbon derivatives
- Weather Derivatives
- Municipal Bonds and Sea Level Rise
- Physical risks
- Transition risks
- Liability risks
Climate Finance and Risk Management: Pricing the Future
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Efficiency and Negative Externalities in Markets
Market Efficiency and Negative Externalities
Explain why private market outcomes are efficient without externalities and why negative externalities prevent social efficiency.
- private market outcome
- social efficiency
- negative externality
- socially optimal quantity
- marginal cost
- marginal benefit
- external cost
- third parties
- pollution
- consumer surplus
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