Teaching Climate Change in Economics

Preparing the Economists of Tomorrow

Teaching Climate Change in Economics

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In 2019, the University of Bristol became the first UK university to formally declare a climate emergency. In the following year, a further 36 institutions in the UK followed suit. Beyond their own climate research and agendas to achieve carbon neutrality, universities play a key role in educating their students and the public about the climate crisis.

Climate change is at the centre of public discourse, and a degree in economics can equip graduates with tools to analyse the challenges it presents and to find effective solutions and policies in response. In this article, building on the Royal Economic Society’s climate summit, we share a few thoughts on how to embed discussion of climate change and environmental sustainability into economics pedagogy.

Climate change can sit at the heart of the economics curriculum

Many economists see the environment as an essential part of the economic system. Indeed, CORE Econ defines the discipline⁠ “as the study of how people interact with each other and with their natural environment in producing and acquiring their livelihoods, and how this may change over time and differs across societies”.

Considering the central role of the environment within real-world economies, the study of climate change and sustainability should be integrated throughout the economics curriculum and not relegated to optional units in the final year. This approach can embed the pressing societal issues our world faces within the subject, helping to motivate students and support their learning.

Students studying CORE Econ are regularly asked at the beginning of their programme about what they believe are the most pressing problems that economists today should be addressing. In 2021, climate change and resource challenges featured strongly in answers from students across the world.

We also need to consider how to embed climate change in students’ studies. Indeed, some of the work in environmental economics is technical and advanced – think for example of integrated assessment models or the valuation literature. Nevertheless, the research often has very straightforward intuition. For example in microeconomics, public goods, externalities, co-ordination problems, prisoners’ dilemmas and the tragedy of the commons can all be introduced through the lens of climate change. Similarly, in macroeconomics, we can discuss policies such as green new deals and stimulus packages that are becoming increasingly common in political discourse.

While the models that students see as first year undergraduates are often simple, they offer students the chance to gain deeper insights, and ask important questions. These could include: what is the optimal level of pollution? Or what determines the optimal carbon price? Once students have developed sufficient empirical and theoretical foundations through their degrees, these ideas can be revisited in more depth in later years.

Using real-world examples as a launchpad for learning is not new. Case studies and problem-based learning underline the pedagogical value of starting with a particular scenario (a case) and then thinking about how discipline methods can help to understand it (see for example Volpe, 2002).

This approach can be applied to climate change and environmental sustainability, whereby students would learn micro and macro-economics through the lens of environmental challenges. This pedagogical method engages students and can facilitate deep learning (see for example Basu, 2021).

For example, economics has a lot to say about the most efficient ways to reduce emissions, mitigate the costs of climate damages, the economic impact of strategies used to reduce emissions and lower risks from climate emergencies, and more. Consider using a real-world example from your area, such as imposing a carbon tax or building clean energy sources (such as windmills or nuclear power facilities) to host a classroom discussion (or assign empirical work – more on that in the following section).

A chapter in the newly published Sustainability Handbook by the Economics Network shares various ideas and examples of how to motivate teaching through environmental challenges.

Empirical units can be enhanced by discussions of climate change

Using real-world data relating to environmental sustainability and climate change is another way in which these issues can be embedded in economics programmes. This approach can motivate students, help to develop empirical techniques and employability skills and provide framing opportunities to help students to apply economic reasoning.

There are a range of data sources that can be linked to climate change:

  1. Basic climate relationships such as the link between CO2 emissions and the rise in average global temperatures (global warming) can be identified using data from OECD, Our World in Data, United Nations and NASA Global Climate Change.
  2. Climate attitudes and perceptions are captured in large scale surveys such as Eurobarometer and the British Social Attitude Survey. This can aid discussions in the classroom about the socially optimal amounts of intervention or discussing the challenges of intervention.
  3. Household datasets in most countries have information on spending, work, and health, which can be linked to the environment and climate change (see for example the OECD Household Surveys, EPIC).

The CORE project has prepared tasks on measuring climate change and the willingness to pay for climate change mitigation using real world data. Instructors could, of course, construct their own examples for students based on the technicalities they would like to focus on.

Assessment can be authentic, and focused around climate change

Climate change offers an opportunity to embed authentic assessment into the curriculum –encouraging students apply the economics they have learned in various contexts. For example, assessments could include:

  • Coursework policy reports to inform, for example, local or national governments on an environmental question. This could include an economic evaluation of the expansion of fisheries, increasing on- and off-shore wind-energy, introducing a ‘meat tax’ to reduce carbon emissions, etc.
  • An empirical project set around environmental data sets. For example, finding the impact of a carbon tax in a specific market using OECD data.
  • Exam-style short answer questions where students interpret research findings for a given scenario.

Students sometimes struggle with making new connections between economic ideas and real-world applications, so it is important that scaffolding is provided. Educators should ensure constructive alignment between the learning outcomes, the assessment, and what happens in the classroom.

Challenges to embedding climate change

There are a number of challenges to embedding climate change and sustainability within an economics curriculum that need to be considered.

1. Climate change deniers may challenge the classroom experience

Just as in any area of life, there are some individuals who challenge the dominant paradigm, and climate change is not immune to this. As such, instructors may encounter climate scepticism of both the extent of the problem, and the possible solutions.

Scepticism and pluralism of ideas in higher education provide lots of opportunities for exploring issues in more depth. For instance, they provide an opportunity to discuss empirical evidence and explore causality of relationships. They also offer opportunities to discuss opposing normative views, and analyse important questions such as whether developed countries, or developing countries, or all countries, should seek to de-carbonise, and the costs associated with that.

2. Be aware of climate anxiety

As with any topic that has the potential of having negative impacts in years to come, there is a chance that teaching climate change may provoke anxiety in students. Climate anxiety is the fear that people experience about the climate crisis, and it is soaring. Research suggests that climate anxiety can affect mental, emotional and physical health. But at the same time, it is associated with guilt and feeling responsible for climate change, which increases interest in studying and discussing the topic (see for example Hickman et al, 2021).

While novel for some economics instructors, dealing with sensitive topics that students may have personal associations with is not new in higher education. Economists can learn techniques for holding classroom discussions on such topics from other disciplines such as psychology, gender studies, medicine, education, or creative arts. The creation of an inclusive learning environment, feedback mechanisms, and clear guidelines on how to communicate and debate become important when planning lessons about sensitive topics. The evidence on content warnings is mixed, but instructors may want to consider the use of them, as well consider providing flexibility and options around assessments as a way of mitigating the risk of anxiety.


Teaching about climate change economics and environmental sustainability within the economics curriculum is arguably a civic duty in a discipline that engages with major societal challenges.

Economics has a lot to offer both in terms of analysing the past and present, and proposing effective solutions for the future. Educating students to help them develop the hard and soft skills that they need to shape the debate around environmental sustainability does not only foster employability, but is also likely to increase students’ engagement in their learning.

This article was produced in cooperation with the Economics Network, the largest and longest-established academic organisation devoted to improving the teaching and learning of economics in higher education. Learn more about the Economics Network here.

Header image credit: Pixabay.


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