Postgraduate Course: Carbon Markets (CMSE11154)
Course Outline
| School | Business School |
College | College of Humanities and Social Science |
| Credit level (Normal year taken) | SCQF Level 11 (Postgraduate) |
Availability | Available to all students |
| SCQF Credits | 15 |
ECTS Credits | 7.5 |
| Summary | Global GHG emissions covered by emission trading schemes (ETS) were 4% in 2010, 9% in 2016, and are expected to reach 16% in 2017 (ICAP 2016). Carbon markets are also expected to play an increasing role following the Paris Agreement, with carbon markets identified in almost half of Parties¿ National Intended Contributions. There is an urgent need to develop a graduate skills base that can serve growing employer demand for expertise in this area. |
| Course description |
The course aims to provide students with a strong theoretical grasp of carbon trading and offsetting, and a practical understanding of the mechanics of different carbon markets. Students should come away from the course able to evaluate the risks and opportunities associated with carbon markets.
The course will complement the second semester course in Low Carbon Investment, which will focus on climate change investments, which are not driven solely by carbon markets. The measurement, auditing and reporting practices associated with various markets will be covered in more depth in the semester 1 Carbon Accounting course, and the practice of emission reduction project development will be covered in the semester 2 option of that name. Finally, the course is supported by the first semester course in Energy Finance, as projects operating in carbon markets are typically still reliant on conventional financing for the bulk of their underlying investment.
Syllabus
1. The economics of carbon markets, externalities and rationale for carbon pricing, price versus quantity instruments
2. Introduction to carbon trading, market participants and carbon financial instruments
3. Understanding carbon price drivers, financial regulation of European carbon platforms, carbon market liquidity and efficiency
4. Kyoto Protocol mechanisms: Clean Development Mechanism and Joint Implementation; emission reduction purchase agreements (ERPA)
5. The voluntary carbon market; REDD+ (reducting emissions from deforestation and forest degradation)
6. Carbon leakage
7. EU-ETS policy: The Market Stability Reserve
8. Global carbon market: Prospects for linking existing schemes
9. New market mechanisms following the Paris Agreement
Student Learning Experience
Formal teaching occurs in lectures. Much of the learning will be the result of students' own reading and reflection, and preparation for coursework. A high level of student participation is expected, through discussion in class and working in groups. Scholarly endeavour is fundamentally about building on the discovery and insights of others, and we hope that team co-operation will enrich all students.
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Entry Requirements (not applicable to Visiting Students)
| Pre-requisites |
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Co-requisites | |
| Prohibited Combinations | |
Other requirements | For Business School PG students only, or by special permission of the School. Please contact the course secretary. |
Information for Visiting Students
| Pre-requisites | None |
| High Demand Course? |
Yes |
Course Delivery Information
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| Academic year 2017/18, Available to all students (SV1)
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Quota: None |
| Course Start |
Semester 1 |
Timetable |
Timetable |
| Learning and Teaching activities (Further Info) |
Total Hours:
150
(
Lecture Hours 20,
Summative Assessment Hours 92,
Programme Level Learning and Teaching Hours 3,
Directed Learning and Independent Learning Hours
35 )
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| Assessment (Further Info) |
Written Exam
70 %,
Coursework
30 %,
Practical Exam
0 %
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| Additional Information (Assessment) |
Coursework - 30%
Exam - 70%
Coursework Assessment
Form of Assessment: Students will be assigned to groups of 4 or 5 members to evaluate a specific carbon market. Each group will be tasked with producing an executive report of no more than 2,000 words and a 20-minute presentation, covering how the scheme came about (relevant political and regulatory context), the key design features of the scheme, and your critical opinion as to whether this is a well-designed market, and how it could be improved (if at all).
60% of the marks will be a single mark for the group based on content, taking the content of both the presentation and the executive report into account. 20% will be a group mark based on the overall presentation, including visual presentation of slides (on screen and in hand-outs). The final 20% will be an individual mark based on your oral contribution to the presentation (including responses to questions).
Dates of Assessments:
- Group reports are due at 12 noon on Monday 31st October 2016
- Group presentations (based on the group reports) will take place during the lectures on Tuesday 1st November 2016
- The degree examination will take place between 8th and 21st December
2016 (with the exact date to be determined by the University during the first Semester). |
| Feedback |
Presentation feedback will be provided on a feedback form in the appropriate format. Assessment marks and feedback will be provided a maximum of 15 days after submission.
Feedback Format
Weeks 2 - 7: In-class discussions, case studies and exercises (informal peer and lecture feedback)
Weeks 7 - 10: Group presentations (formal peer and lecturer feedback)
December 2015: Lecturer will provide feedback on group reports
January 2016: Lecturer will provide generic feedback on the exam |
| Exam Information |
| Exam Diet |
Paper Name |
Hours & Minutes |
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| Main Exam Diet S1 (December) | Carbon Markets | 2:00 | |
Learning Outcomes
On completion of this course, the student will be able to:
- Describe and critically evaluate the structure and price dynamics of the major global, regional and national-level carbon markets.
- Explain how carbon credits are created and traded in the major carbon markets
- Discuss analytically the financial and strategic implications of carbon markets for business.
- Critically evaluate alternative design options for carbon markets.
- Describe the likely future trends in carbon market development.
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Reading List
See the essential reading for Week 1 below. This should be done before the Week 1 lectures. For all other readings please consult the online Resource List for the Carbon Markets course, which is available via Learn. Students are recommended to become very familiar with the World Bank's annual State and Trends of the Carbon Pricing report, the latest report of which is entitled State and Trends of Carbon Pricing 2015, published by Ecofys, a pdf version of which is available at:
http://www.worldbank.org/content/dam/Worldbank/document/Climate/State-and-Trend-Report-2015.pdf
There is also a preview of the 2016 report available at:
http://www.ecofys.com/files/files/world-bank-group_ecofys-carbon-pricing-watch_160525.pdf
Stern, N. (2007) The Economics of Climate Change: The Stern Review. Cambridge: Cambridge University Press. The full report is available in the Main Library and can be perused at your leisure, but before the class please read pp. 25-27 of the electronic version of Chapter 2 which you will find on Learn (a brief introduction to the MB-MC of abatement diagram).
Hepburn, C. (2006) Regulation by prices, quantities, or both: A review of instrument choice. Oxford Review of Economic Policy 22 (2): 226-247 (read at least to page 239, plus the conclusions). [Note: a slightly updated version of the same paper is available as chapter 18 of Dieter Helm and Cameron Hepburn (eds) The Economics and Politics of Climate Change, Oxford University Press, 2009.] |
Additional Information
| Graduate Attributes and Skills |
Knowledge and Understanding
After completing this course, students should have:
- A strong understanding of the key and variable characteristics of emissions trading schemes.
- A critical understanding of the main strengths and weakness of carbon markets.
- A strong understanding of the nature of carbon offset credits and the ways in which they are used.
Applied Knowledge, Skills and Understanding
After completing this course, students should be able to:
- Think analytically about the financial and strategic implications of carbon markets for business.
- Critically evaluate alternative policy approaches to carbon markets.
- Critically evaluate press coverage of carbon market issues.
Cognitive Skills
After completing this course, students should be able to:
- Critically evaluate and synthesize new and complex ideas.
- Make informed judgements in the absence of complete or consistent data.
- Offer creative solutions and insights on complex issues.
Communication, ICT, and Numeracy Skills
After completing this course, students should be able to:
- Comprehend, speak and write the language of carbon markets.
- Verbally communicate and present complex information in a concise and logical way.
Autonomy, Accountability and Working with Others
After completing this course, students should be able to:
- Cooperate with others from different professional, educational and cultural backgrounds to produce group analysis and present the results of group work.
- Manage personal study time and meet assignment deadlines. |
| Keywords | CarbM |
Contacts
| Course organiser | Dr Matthew Brander
Tel: (0131 6)51 5547
Email: |
Course secretary | Miss Ashley Harper
Tel: (0131 6)51 5671
Email: |
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