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Frontiers in Applied Economics

Climate Change Economics: Theory and Empirics

Measuring climate damages through economic theory, econometric methods and hands-on analysis of climate data.

10h (5 days)

€1,470

Face-to-face

English

Next edition: July 5-9, 2027

Early bird deadline: April 15, 2027

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Frontiers in Applied Economics

Climate Change Economics: Theory and Empirics

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Who is this Course for?

Frontiers in Applied Economics

Climate Change Economics: Theory and Empirics

Course overview

Climate change is no longer a distant scenario: 2024 was the first calendar year with global temperatures more than 1.5°C above pre-industrial levels, and heat waves, droughts, floods, and storms are already reshaping agriculture, health, labor markets, and infrastructure worldwide.

Climate change is creating an increasing need for reliable estimates of its economic impacts. This course examines the economic theory and econometric methods used to measure climate damages, from the social cost of carbon and climate policy to the effects of extreme weather on agriculture, health, labor markets, and infrastructure.

Participants will explore how to estimate climate damage functions, account for adaptation and distinguish short-term weather effects from long-term climate change. Through hands-on sessions in R and Stata, they will also learn to process geospatial climate data, construct weather panels and project future impacts using climate-model outputs.

Combining economic theory, applied econometrics and practical data analysis, the course equips researchers, policymakers and analysts with the tools to produce and critically assess climate-impact estimates for research, policy evaluation and climate-risk analysis.

Faculty

Who is this course for?

The course may be of interest to:

Master’s and PhD students in economics and related fields (environmental, development, agricultural, public, urban and spatial economics) who want to do research with climate data
Researchers (post-docs, early-career faculty) entering climate economics or adding climate impacts to their research agenda
Public policy and industry practitioners: analysts in governments, international organizations, central banks and financial supervisors, development agencies, consultancies, and climate-risk and ESG teams, who need to produce or critically assess estimates of climate impacts

Learning outcomes

By the end of the course, participants will be able to:

Understand the policy problem: explain why climate change is a global externality, how Pigouvian pricing and the social cost of carbon correct it, and why the damage function is the pivotal input for climate policy
Distinguish weather from climate: understand formally and empirically why the effects of weather shocks differ from the effects of climate change, and the roles of ex post adaptation, ex ante adaptation, dynamics and general equilibrium spillovers
Master the empirical toolkit: evaluate and implement the main strategies to estimate climate damages. These are cross-sectional (Ricardian), panel fixed effects with nonlinear weather, long differences, heterogeneous-response designs, revealed-preference recovery of adaptation costs, and frontier methods (sufficient statistics and dynamic bounds). Participants will know what each strategy identifies and the assumptions it requires
Work with climate data: process gridded climate and geospatial data in R (vector and raster data, extraction to administrative units, temperature bins and degree days, climate-model projections), and estimate, interpret, and project damage functions in R and Stata

Key topics for Climate Change Economics course

Here is an outline of the topics that will be discussed during the course, including practical sessions.

Day 1: Climate change as an externality: why measuring damages matters

Lecture

Market failures and externalities
Pigou vs. Coase
Carbon taxes and cap-and-trade
Integrated assessment models, damage functions and the social cost of carbon
Weather vs. climate: definitions and roadmap

Practical

Climate data are spatial data (1): `R` refresher, vector data with `sf`, projections, spatial operations, administrative boundaries and maps

Day 2: Measuring the effects of weather: cross-sectional and panel approaches

Lecture

The Ricardian (cross-sectional) approach and its pitfalls
Panel fixed-effects weather regressions; nonlinear effects (temperature bins, degree days)
Aggregation and inference
What we learned about agriculture, health, labor, energy, and GDP
What panels do and do not identify

Practical

Climate data are spatial data (2): rasters with `terra` package, gridded climate data (ERA5, CRU, WorldClim), extraction to administrative units, building a weather panel

Day 3: From weather to climate: the economics of adaptation

Lecture

A framework for ex post and ex ante adaptation
The envelope theorem and its limits
Long differences, heterogeneous responses, spatial first differences, weather forecasts
What the evidence says about adaptation

Practical

Estimating damage functions in `R` (`fixest`) and `Stata` (`reghdfe`): response functions, spatial standard errors, panel vs. long differences, weather × climate interactions

Day 4: Adaptation costs, projections and the social cost of carbon

Lecture

The global mortality costs of climate change accounting for adaptation (Carleton et al., 2022): estimation, projections, revealed-preference adaptation costs, and a partial social cost of carbon
Adaptation policy: evaluating interventions, justifications for public intervention, and pitfalls

Practical

Projecting damages under future climate (CMIP6), with and without adaptation; mapping impacts

Day 5: The frontier: dynamics, general equilibrium and the "trilemma" of climate damages

Lecture

A unified framework (present, past, future, and “elsewhere” weather)
Sufficient statistics for climate counterfactuals
Dynamic bounds from weather variation
Trade, migration and spatial general equilibrium
Climate policy under uncertainty about damages

Practical

Implementing frontier estimators and comparing climate counterfactuals across methods
Wrap-up

Call for Papers

Participants can present their work and receive feedback from course professors during lunchtime workshops held on Tuesdays and Wednesdays each week of the program.

To submit a paper, email summerschool@bse.eu with “Frontiers of Applied Economics call for papers” in the subject line by June 14. We will announce the presentation schedule once paper selection is complete.

Participants who present their work will receive an additional certificate at the end of the Summer School.

List of References

See below for a list of selected readings.

Articles

Carleton, T., Duflo, E., Jack, B. K. and Zappalà, G. (2024). “Adaptation to climate change.” Handbook of the Economics of Climate Change, Vol. 1, 143–248.
Lemoine, D., Hausman, C. and Shrader, J. G. (2026). “Navigating the ‘Problem from Hell’: A Guide to Climate Damages.” Journal of Economic Literature (forthcoming).
Dell, M., Jones, B. F. and Olken, B. A. (2014). “What do we learn from the weather? The new climate–economy literature.” Journal of Economic Literature, 52(3): 740–798.
Hsiang, S. (2016). “Climate econometrics.” Annual Review of Resource Economics, 8: 43–75.
Mendelsohn, R., Nordhaus, W. and Shaw, D. (1994). “The impact of global warming on agriculture: a Ricardian analysis.” American Economic Review, 84(4): 753–771.
Deschênes, O. and Greenstone, M. (2007). “The economic impacts of climate change: Evidence from agricultural output and random fluctuations in weather.” American Economic Review, 97(1): 354–385.
Schlenker, W. and Roberts, M. J. (2009). “Nonlinear temperature effects indicate severe damages to U.S. crop yields under climate change.” PNAS, 106(37): 15594–15598.
Burke, M., Hsiang, S. M. and Miguel, E. (2015). “Global non-linear effect of temperature on economic production.” Nature, 527: 235–239.
Burke, M. and Emerick, K. (2016). “Adaptation to climate change: Evidence from US agriculture.” American Economic Journal: Economic Policy, 8(3): 106–140.
Carleton, T., et al. (2022). “Valuing the global mortality consequences of climate change accounting for adaptation costs and benefits.” Quarterly Journal of Economics, 137(4): 2037–2105.
Mérel, P., Paroissien, E. and Gammans, M. (2024). “Sufficient statistics for climate change counterfactuals.” Journal of Environmental Economics and Management, 124: 102940.
Lemoine, D. (2023). “Estimating the consequences of climate change from variation in weather.” NBER Working Paper 25008.
Barrage, L. and Nordhaus, W. (2024). “Policies, projections, and the social cost of carbon: Results from the DICE-2023 model.” PNAS, 121(13).
Cruz, J.-L. and Rossi-Hansberg, E. (2024). “The economic geography of global warming.” Review of Economic Studies, 91(2): 899–939.

Teaching Methods and Software

Teaching Methods

Lectures: conceptual frameworks and close reading of key papers, with discussion
Hands-on practical sessions: a short guided exposition followed by about 1 hour of supervised hands-on work. Participants build their own climate-economy dataset during the week and use it to replicate and extend published analyses. Take-home exercises consolidate each session

Software and Hardware

`R`/`RStudio` (packages `sf`, `terra`, `exactextractr`, `fixest`, among others) for all geospatial work and econometrics; `Stata` (`reghdfe`) materials are also provided for the econometric exercises
All data used are publicly available
Participants must bring their own laptop with `R`/`RStudio` installed (a setup guide is sent before the course)

Why join our Summer School?

All BSE Summer courses are taught to the same high standard as our Master’s programs. Join us to:

1

Network with like-minded peers

2

Study in vibrant Barcelona

3

Learn from world-renowned faculty

Admissions and Requirements

Please make sure you are eligible to apply before submitting your application.

Next edition: July 5-9, 2027

Early Bird deadline: April 15, 2027

Requirements

A strong background in Economics or a field closely related to the course topic (Statistics, Law, etc.)
Postgraduate degree or current Master’s/PhD studies related to the course topic
Relevant professional experience

Admissions Requirements for Climate Change Economics: Theory and Empirics course

Intermediate microeconomics (externalities, optimization) and econometrics at the level of a first-year master’s course (OLS, panel data and fixed effects, basic causal inference)
Basic programming experience in `R` and/or `Stata`. No prior experience with geospatial data is required: the course starts with a refresher

Schedule

Here is your schedule for this edition of BSE Frontiers of Applied Economics Summer School, Climate Change Economics: Theory and Empirics course.

Time

5

mon

6

tue

7

wed

8

thu

9

fri

09:00 - 11:00

Lecture

11:30-13:00

Practical

13:45 - 14:45

Paper Presentations*

* These sessions only take place if enough papers are submitted.

Credit Transfers (ECTs)

To be eligible for credit transfer, students must complete a final project.

Participants requesting ECTs credit will submit a short critical essay (around 3-4 pages, 1.5-spaced, font size 11) on a paper discussed in the course, due one week after the course ends. The essay should summarize the research question and findings, assess the methodology, and discuss one implication for research or policy. Assessment will emphasize understanding and clear reasoning; no original data analysis is required.

Certificate of Attendance

Participants who attend more than 80% of the course will receive a Certificate of Attendance, free of charge.

Course

Climate Change Economics: Theory and Empirics

Economics of Migration

Gender Economics

Non-wage Amenities in the Labor Market

Political Economy

Social Insurance: From Causal Evidence to Policy Design

Modality

Face-to-face

Total Hours

17.5

10

ECTS

1

Regular Fee

€1,470

€1,260

Reduced Fee*

€840

€740

* Reduced Fee applies for PhD or Master’s students, Alumni of BSE Master’s programs, and participants who are unemployed.

Multiple discounts are available.

For more information on discounts for participants funding their own course, please click here.

For more information on discounts for companies and institutions enrolling their employees, please click here.

Full discount conditions are available here.

FAQ

Still have questions? Check out our FAQ section.

Can I see the full Summer School calendar?

You can view the full Summer School calendar here.

Is accommodation included in the course fee?

Unfortunately, accommodation is not included in the course fee. Participants are responsible for finding accommodation.

Are the sessions recorded?

Sessions will NOT be recorded; However, the materials provided by the professor will be available for a month after the course has finished.

How much does each Summer School course cost?

Fees for each course may vary. Please consult each course page for accurate information.

Are there any discounts available?

Yes, BSE offers a variety of discounts on its Summer School courses. See more information about available discounts or request a personalized discount quote by email.

Can I take more than one course?

Yes! you can combine any of the Summer School courses (schedule permitting). See the full course calendar.

Credit Transfer (ECTS)

To be eligible for credit transfer, students must complete a final project.

Participants requesting ECTs credit will submit a short critical essay (around 3-4 pages, 1.5-spaced, font size 11) on a paper discussed in the course, due one week after the course ends. The essay should summarize the research question and findings, assess the methodology, and discuss one implication for research or policy. Assessment will emphasize understanding and clear reasoning; no original data analysis is required.

Consult the Summer School Admissions page for more information about this option.

Cancelation and Refund Policy

Please consult BSE Summer School policies for more information.

Are there any evening activities during the course?

Yes, a social dinner is held once a week for all participants, and it is free to attend.

Contact our Admissions Team

Mix and match your summer courses!

Remember that you can combine this program with courses in any of the other BSE Summer School programs (schedule permitting). Maximise your learning this summer and take advantage of our multiple-course discount.

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