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TITLE: CEEN IA7290: CARBON PRICING
SEMESTER: Fall 2025
SCHEDULE: Monday 5:10pm‐7:00pm
LOCATION: International Affairs Building (IAB) 501B
INSTRUCTOR: Ruben Lubowski
EMAIL: rl2659@columbia.edu
OFFICE HOURS: To be announced
CREDITS: 3

Course description:
Carbon pricing has become a central tool in global climate policy, with over 70 jurisdictions
implementing carbon taxes or emissions trading systems that now cover more than one quarter
of global emissions. Existing programs are under reform and expansion while new programs are
under development across every continent. Carbon pricing is becoming increasingly entwined
with international trade and there is growing interest from companies and investors in carbon
and carbon regulations as a source of risk and potential opportunities. This course explores how
carbon markets and taxes are designed, reformed, and evaluated, using real-world case studies
from Europe, the Americas, Asia, and beyond. Students will follow a structured, step-by-step
framework for designing effective carbon pricing policies across sectors, including energy,
transportation, industry, and land use. The course examines market-based policies, including
emissions trading systems (cap-and-trade), carbon taxes, and crediting (“offset”) programs, as
well as emerging debates around integrity and equity. Students will consider the role of carbon
pricing within the climate policy toolkit and learn design principles and tradeoffs, common
challenges, perspectives of key stakeholders, and lessons learned to date. Topics also include
the intersection of pricing with complementary policies, carbon border adjustments, voluntary
markets, corporate climate strategies, natural climate solutions, and modeling frameworks to
inform policy and market choices. By the end of the course, students will have evaluated and
critiqued existing and proposed policies, developed novel policy proposals, and be prepared to
understand, navigate, and potentially shape future carbon pricing innovations.
Recommended prerequisites:
While the class is suitable for a broad range of backgrounds and there are no required
prerequisites, the ideal preparation includes INAF U6071/CEEN IA7200 Fundamentals of
Environmental Policy or other introductory course in environmental economics and policy.
Principal texts (available online):
Partnership for Market Readiness; International Carbon Action Partnership. 2016. Emissions
Trading in Practice: A Handbook on Design and Implementation. World Bank, Washington, DC.
Partnership for Market Readiness; International Carbon Action Partnership. 2021. Emissions
Trading in Practice: A Handbook on Design and Implementation, Second Edition. World Bank,
Washington, DC.
Partnership for Market Readiness. 2017. Carbon Tax Guide: A Handbook for Policy Makers.
World Bank, Washington, DC.
Additional journal articles, reports and primary-source readings will be posted online.
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Grading:
Grades for the course will be based on three components, as follows:
1) Class participation (15% of total grade). Regular attendance and active class participation will
be an important element of this class. Students are expected to have done the readings for
each lecture before class and to contribute to class discussions, making relevant comments and
asking questions that enhance the quality of the class experience for themselves and others. If
you miss class due to a medical emergency, please provide a doctor's note.
2) Three individual short assignments, each worth 15% (45% of total grade). There will be three
short (3-5 page) papers critically evaluating real-world policies, either implemented or proposed.
Papers are always due at the beginning of class. No late assignments will be accepted.
i. The first paper will consider an actual proposal for a carbon tax.
ii. The second paper will consider an actual proposal for an emissions trading program.
iii. The third paper will be a case study of an actual policy implemented in the past. This
assignment will be due on different days for different teams of students. Students will be
divided into small groups, each assigned to one of 6 case studies to be discussed by the
class. Papers and presentations will be individual but students are encouraged to work
together as a study group to plan their papers and presentations.
3) Team project and presentation (40% of total grade). There will be a final team project in
which students will divide into four teams to develop a novel policy proposal, write a paper about
it (15-20 pages), and deliver an in-class presentation (25 minutes) at the end of the semester.
Students will choose from a list of topics provided or develop their own topic with the permission
of the professor. The choice of topics must be finalized by week 7.
If you feel that part of your assignment was overlooked or otherwise graded it incorrectly, please
send a written note about what you feel should be regarded within two weeks from when the
assignment was returned. Once the two weeks have passed, you forfeit the right for a re-grade.
SIPA Academic Integrity Statement:
The School of International & Public Affairs does not tolerate cheating and/or plagiarism in any
form. Those students who violate the Code of Academic & Professional Conduct will be subject
to the Dean’s Disciplinary Procedures.
Please familiarize yourself with the proper methods of citation and attribution. The School
provides some useful resources online; we strongly encourage you to familiarize yourself with
these various styles before conducting your research. Cut and paste the following link into your
browser to view the Code of Academic & Professional Conduct and to access useful resources
on citation and attribution: http://bulletin.columbia.edu/sipa/academic-policies/
Violations of the Code of Academic & Professional Conduct should be reported to the Associate
Dean for Student Affairs.
SIPA Disability Statement:
SIPA is committed to ensuring that students registered with Columbia University’s Disability
Services (DS) receive the reasonable accommodations necessary for their full participation in
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their academic programs. If you are a student with a disability and have a DS-certified
accommodation letter, you may wish to make an appointment with the course instructor to
discuss your accommodations. Faculty provide disability accommodations to students with DS-
certified accommodation letters, and they provide the accommodations specified in such
letters. If you have any additional questions, please contact
Class Schedule:
Below is a preliminary course outline that is subject to change. Sections may be extended or
abbreviated, according to the progress of the class. In the last column of the table, ETP and
CTG refer to Emissions Trading in Practice and Carbon Tax Guide, respectively, and numbers
refer to chapters. Additional journal articles, policy reports and primary source readings will be
posted over the course of the term. An indicative list of readings follows the table below.
Week-by-Week List of Class Topics (subject to modification)
Date Topic (key concepts)
Textbook chapters
(readings and case study
materials to be posted)
Week 1:
Sept. 8

Introduction to the class and to carbon pricing.
Overview of existing and emerging carbon pricing
initiatives around the world and of history of relevant
international climate policy developments (e.g. Paris
Agreement).
ETP (Synthesis), CTG (1)
Week 2:
Sept. 15
Laying the foundation for carbon pricing: Setting ETS
objectives and managing policy interactions. Economics
and political economy alternative policy instruments.
Evidence on carbon market and carbon tax impacts.
ETP (Before you Begin),
CTG (Ch. 2, 3)
Week 3:
Sept. 22
Deciding the scope of the program (covered sectors,
greenhouse gases, point of regulation, thresholds).
Modeling tools and frameworks.
ETP (1), CTG (4, 5),
Week 4:
Sept. 29
Setting the cap and/or tax levels. Social cost of carbon.
Relationship to climate and carbon finance and recent
developments.
ETP (2), CTG (6), Case
study #1.
Week 5:
Oct. 6
Guest speaker (TBC).
Private regulated entity perspective. Paper # 1 due.
Week 6:
Oct. 13 Distributing allowances and determining use of revenues.
ETP (3), CTG (7, 8), Case
study #2.
Week 7:
Oct. 20
Considering use of offsets and experience with emissions
reduction crediting systems.
Carbon pricing strategies to reduce deforestation and
address emissions from the land sector.
ETP (4), Final project
topics due, Case study #3

Week 8:
Oct. 27
Address temporal flexibility, price predictability and cost
containment. Derivatives and futures markets.
ETP (5, 6), Paper # 2
due.
Nov. 3 Academic Holiday
Week 9:
Nov. 10
Ensuring compliance and oversight. Monitoring reporting
and verification systems. Oversight and regulation.
ETP (7), CTG (9), Case
study #4

Week 10:
Nov. 17
Market linkages and international cooperation:
opportunities and challenges. ETP (9), Case study #5
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Week 11:
Nov. 24
Engage stakeholders and build capacity. Market
infrastructure requirements. ETP (8), Case study #6
Week 12:
Dec. 1 Implementation phases, program evaluations and revision. ETP (10), CTG (10)
Week 13:
Dec. 8 Final team project presentations.
In-class presentation and
papers due.

Indicative Supplemental Readings (subject to change, please check course site)
Week 1: Introduction
Chapter 1, “Introduction,” World Bank. 2023.State and Trends of Carbon Pricing 2023 State
and Trends of Carbon Pricing (June), World Bank, Washington, DC.
Chapter 2, “Carbon Taxes and Emissions Trading Systems,” World Bank. 2023.State and
Trends of Carbon Pricing 2023 State and Trends of Carbon Pricing (June), World Bank,
Washington, DC.
Week 2: Laying the foundation for carbon pricing
Aldy, Joe and R. Stavins. 2012. “The Promise and Problems of Pricing Carbon: Theory and
Experience.” Journal of Environment & Development.” 21(2) 152–180.
Narassimhan, Easwaran, Kelly S. Gallagher, Stefan Koester and Julio Rivera Alejo. 2018.
“Carbon pricing in practice: a review of existing emissions trading systems.” Climate Policy,
18(8): 967-991.
Week 3: Deciding the scope of the program
Burtraw, Dallas and Samantha Sekar. 2013. “Two World Views on Carbon Revenues.” Journal
of Environments Studies and Sciences, 4:110–120
Stavins, Robert. 2019. “The Future of U.S. Carbon-Pricing Policy.” Discussion Paper 2019-81.
Cambridge, MA. Harvard Environmental Economics Program.
Week 4: Setting the cap and/or tax levels.
British Columbia carbon tax case study.
Chapter 4 on “Climate finance and climate markets: toward an integrated approach”, World
Bank, Ecofys and Vivid Economics. 2017. State and Trends of Carbon Pricing 2017
(November). World Bank, Washington, DC.
Week 5: Guest speaker (TBD) and private regulated entity perspective
Peel, Jacqueline. 2014. “The Australian Carbon Pricing Mechanism: Promise and Pitfalls on the
Pathway to Clean Energy Future,” The Minnesota Journal of Law, Science & Technology,
15(1): 429-466.
Chapter 4, “Internal carbon pricing,” World Bank. 2020. State and Trends of Carbon Pricing
2020 State and Trends of Carbon Pricing (June), World Bank, Washington, DC.
CDP. 2017. Putting a Price on Carbon: A Handbook for Indian Companies. London, UK.
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Week 6: Distributing allowances and determining use of revenues.
California cap & trade program case study.
Climate Leadership Council (James A. Baker III et al.). 2017. “The Conservative Case for
Carbon Dividends.”
Week 7: Consider use of offsets
Schwartzman, Stephan, Ruben N. Lubowski, Stephen W. Pacala, Nathaniel O. Keohane, Suzi
Kerr, Michael Oppenheimer and Steven P. Hamburg. 2021. “Environmental integrity of
emissions reductions depends on scale and systemic changes, not sector of origin.”
Environmental Research Letters 16.
Ward, John, Christine Gerbode, Britta Johnston and Suzi Kerr. 2024. “Markets for NCS Credits-
domestic and international,” Chapter 4, Advancing Effective and Equitable Crediting: Natural
Climate Solutions Crediting Handbook. Environmental Defense Fund, New York, NY.
Week 8: Temporal flexibility
Achim Lerch and Sven Rudolph. 2016. “Just ETS? Social justice and recent reforms in EU and
US carbon markets.” Ch. 14. Stoianoff et al. eds. Market Instruments and the Protection of
Natural Resources.
Schmalensee, Richard, and Robert N. Stavins. 2013. “The SO2 Allowance Trading System: The
Ironic History of a Grand Policy Experiment.” Journal of Economic Perspectives 27(1): 103-
122.
Narassimhan, E., Gallagher, K. S., Koester, S. and Rivera Alejo, J. 2017. Carbon Pricing in
Practice: A Review of the Evidence. Medford, MA. Climate Policy Lab.
Week 9: Compliance and oversight
Patrick Bayer and Michaël Aklin. 2020. “The European Union Emissions Trading System
reduced CO2 emissions despite low prices.” Proceedings of the National Academies of
Science. 117 (16) 8804-8812.
Campos, Pam. 2016. “Compliance Tools for a Global Market Based Measure for Aviation ∙
Compliance Tools for a Global Market Based Measure for International Aviation.” Carbon &
Climate Law Review 10 (2): 153-163.
Schmalensee, Richard and Robert N. Stavins. 2017. “Lessons Learned from Three Decades of
Experience with Cap and Trade.” Review of Environmental Economics and Policy 11(1): 59-
79.
Week 10: Linkages
Leining, Kerr and Bruce-Brand. 2020. “The New Zealand Emissions Trading Scheme: critical
review and future outlook for three design Innovations.” Climate Policy 20 (2): 246-264.
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Schneider et al. 2019. “Double Counting and the Paris Agreement Rulebook.” Science 366
(6462).
Articles 5-6. "Paris Agreement". United Nations Treaty Collection. 8 July 2016.
Stavins, R. N., Michael A. Mehling, and Gilbert E. Metcalf. “Linking Climate Policies to Advance
Global Mitigation.” Science 359 (2018): 997–998.
Green, Jessica F., Thomas Sterner and Gernot Wagner. 2014. “A balance of bottom-up and
top-down in linking climate policies.” Nature Climate Change 4, 1064-1067.
Week 11: Engage stakeholders, build capacity, and market infrastructure requirements.
Stoerk, Thomas, Dan Dudek, and Jia Yang. 2020. “China’s national carbon emissions trading
scheme: lessons from the pilot emission trading scheme, academic literature, and known
policy details.” Climate Policy 19 (4): 472-486.
Executive Summary from Partnership for Market Readiness (PMR), Carbon Pricing Leadership
Coalition (CPLC), 2018. Guide to Communicating Carbon Pricing. Washington, DC.
Week 12: Implementation phases, program evaluations and revision
Ball, Jeffrey. 2018. “Why Carbon Pricing Isn’t Working: Good Idea in Theory, Failing in
Practice.” Foreign Affairs, July/August.
Haites, Erik. 2018. “Carbon taxes and greenhouse gas emissions trading systems: what have
we learned?” Climate Policy, 18 (8): 955-966
Döbbeling-Hildebrandt, Niklas et al. 2024. “Systematic review and meta-analysis of ex-post
evaluations on the effectiveness of carbon pricing.” Nature Communications, 15: 4147


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