Virtual Institute Teaching Material on Trade, the Environment and Sustainable Development: Transition to a Low-carbon Economy

Virtual Institute Teaching Material on Trade and Gender - Volume 1: Unfolding the linksThis teaching material analyses the ways and means to address what is considered by many as the 21st century’s biggest global environmental challenge, the climate change, and the transformation of the current carbon-based economies into low-carbon economies.

Module 1 offers a general introduction to the topic by highlighting the linkages between the economy and the environment. It introduces the services provided by the environment to the economy, factors determining the size of human impacts on the environment, underlining the importance of sustainable economic systems, and concludes by discussing the role of trade as an enabler of sustainable development and poverty reduction.

Module 2 focuses on the science behind climate change. It introduces the components of the climate system, explains how climate change occurs and in which ways economic activities affect climate, and concludes by reviewing the evidence on observed and anticipated changes in the climate system and their impacts on human and natural systems.

Module 3 introduces readers to the economics of climate change. It explains why climate change is considered to be the biggest market failure in human history by highlighting the open-access-nature of the atmosphere and the fact that greenhouse gas emissions are negative externalities. It then shows that the reduction of emissions is a global public good, which generates incentives for nations to free-ride and hampers the implementation of effective solutions to limiting climate change.

Module 4 analyses the politics of climate change. It discusses the various policy instruments and technological solutions to limit climate change and transform economies into low-carbon economies. It explains that, in parallel with such policies, society also needs to undertake actions to adapt human and natural systems to the anticipated impacts of climate change. To conclude, the module reviews key international climate change policy developments, in particular the Paris Agreement, with a special focus on the situation of developing countries.