The topic of lecture 5 is On the Role of Technology Policies in Climate Mitigation Goals. The Professor starts the class by discussing the need of changing present technology in order to avoid earth's temperature of heating more the 2 degrees, and what we need to do in order to spur this technology change. For example setting carbon prices and making it expensive to burn fuel and so on.
By policy maker there is a focus on technology development in order to combat climate change.
The professor discusses the following topics and raises some questions like:
Economists says that in an “ideal market economy” it would be enough to set a price on carbon on the Pigouvian level, so why aren´t politicians doing so?
What policy failures are there currently, like for example fuel subsidies?
Then she moves on and discusses market failure, like emissions externality under pricing, and other concerns relevant for climate policy, and the social premium from Innovation, for cost reductions (with different levels of spillover),