Economics of Climate Change in Energy

The course “Economic Evaluation of Adaptation Projects” is aimed at:

• building an understanding of the economic rationale for adaptation decisions in the energy sector and the need for their quantitative justification in the context of climate change and Ukraine’s post-war recovery;
• introducing the Cost-Benefit Analysis (CBA) methodology as the primary tool for evaluating adaptation projects, including discounting and the calculation of NPV, BCR, IRR, MIRR, DPBP and LCOE adj indicators;
• studying approaches to the identification, classification and monetisation of costs and benefits in adaptation projects, including market and non-market effects as well as direct and indirect impacts;
• mastering tools for risk and uncertainty management: sensitivity analysis, scenario analysis, risk matrix, Monte Carlo simulation and the concept of compound risks;
• developing skills in stakeholder analysis, distributional analysis of costs and benefits across different groups, and conflict-of-interest resolution;
• building the capacity to prioritise adaptation projects using Multi-Criteria Analysis (MCA) and to prepare well-reasoned analytical briefs for decision-makers.

The primary goal of the course is to equip energy sector professionals with the ability to conduct a full economic evaluation of adaptation projects — from identifying climate threats and building a CBA model to managing risks, analysing stakeholders and formulating evidence-based recommendations. The course is focused on practical application of knowledge, taking into account Ukraine’s specific context, international donor requirements and European integration commitments.