Climate Macroeconomics Foundations, Methods, and Computational Analysis

This book provides a unique bridge between theoretical foundations and practical implementation of environmental economics modeling. Through a progressive approach, it guides readers from basic analytical frameworks to advanced computational techniques for analyzing climate change policies.

Starting with intuitive partial equilibrium models, the book systematically builds understanding of three major modeling frameworks: Environmental Dynamic Stochastic General Equilibrium (E-DSGE), Dynamic Integrated Climate-Economy (DICE), and Computable General Equilibrium (CGE) models. Each framework is thoroughly explained with detailed MATLAB implementations, making complex concepts accessible and practical.

The book's distinctive two-part structure serves multiple audiences: Part I develops fundamental concepts through analytically solvable models ideal for advanced undergraduates, while Part II explores sophisticated modeling approaches suitable for graduate students and researchers. Throughout, readers benefit from:

• Comprehensive coverage of carbon taxation, cap-and-trade systems, and other environmental policy instruments
• Detailed MATLAB code for implementing theoretical concepts
• Clear connections between different modeling approaches for policy analysis

Whether you're an economics student learning environmental modeling, a policy analyst working on climate regulations, or a researcher comparing modeling frameworks, this book provides the tools to engage with modern environmental economic analysis.

Part I: Static Frameworks.- Chapter 1. A Basic Static Model.- Chapter 2. Extensions of the Basic Model: The Role of MarketStructure.- Chapter 3. A Static Model with Damage Functions.- Part II: Dynamic Frameworks.- Chapter 4. Dynamic Analysis of Climate Policies: A Two-period Model.- Chapter 5. Infinite-Period Models in Climate Economics.- Part III: Dynamic and Stochastic frameworks.- Chapter 6. Carbon Emissions in Real Business Cycles.- Chapter 7. Carbon Emissions in New Keynesian DSGE Models.- Chapter 8. Production Networks and Carbon Emissions: DSGE and CGE Frameworks.

Y.T. Chan is an Associate Professor at the Bay Area International Business School, Beijing Normal University. He earned his Ph.D. in Economics from McGill University (2017), following degrees from the Chinese University of Hong Kong. His research expertise lies at the intersection of climate change economics and macroeconomics, focusing on environmental policies and monetary policy. He specializes in DSGE modeling to examine the relationships between environmental policies, financial markets, and macroeconomic outcomes. His contributions include influential research on optimal carbon tax rates and green monetary policies, published in leading academic journals.

Dayong Zhang is a Professor of Financial Economics at the Research Institute of Economics and Management, Southwestern University of Finance and Economics. He received his Ph.D. in Economics from the University of Birmingham (2006) and is recognized as both an Elsevier Highly Cited Scholar (2020-2024) and a Clarivate Highly Cited Researcher in Economics & Business (2022). His research focuses on energy finance, climate finance, and financial markets in emerging economies, with over 20 ESI highly cited papers. He serves as the founding co-editor of the Journal of Climate Finance and holds senior editorial positions in Finance Research Letters and International Review of Financial Analysis.