Lesson Plan: Teaching Cost-Benefit Analysis through Climate-related examples

As an undergraduate Economics teacher, you can use this set of computer-based tools to help you in teaching cost-benefit analysis.

This lesson plan will help students to understand the principles of cost-benefit analysis. The activities will allow students to apply cost-benefit analysis to global climate change, in general, and to carbon abatement (an action to mitigate climate change).

Thus, the use of this lesson plan allows you to integrate the teaching of a climate science topic with a core topic in Economics.


Use this lesson plan to help your students find answers to:

  1. Explain the principles of cost-benefit analysis
  2. What are the possible limitations of measuring the costs of climate change in terms of the GDP?
  3. How can cost-benefit analysis be applied to carbon emissions abatement?

Video Tutorial : How to use this Lesson Plan

Please note, the first 3 min 52 sec of the video introduce how to use TROP ICSU resources followed by description of this Lesson Plan.

Global Greenhouse Gas Abatement Cost Curve for 2030

About Lesson Plan

Grade Level Undergraduate
Discipline Economics
Topic(s) in Discipline
  • • Cost-Benefit Analysis
  • • Carbon Abatement
  • • Energy, Economics and Climate Change
Climate Topic
  • • Energy, Economics, and Climate Change
  • • Policies, Politics, and Environmental Governance
  • • Mitigation
Location Global
Languages English, one resource is also available in French
Access Online, Offline
Approximate Time Required 150 – 180 min


Reading (20 – 30 min) A reading that introduces the principles of cost-benefit analysis.

Go to the Reading

Reading (~45 – 60 min) A reading to discuss the economic analysis of climate change and specifically, cost-benefit studies of global climate change.

Go to Ch. 2 (Economic Analysis of Climate Change), pg. 15-25 (Cost-Benefit Studies of Global Climate Change). Also available in French.

Classroom/ Laboratory activity

(~80 min)

A classroom/laboratory activity to perform cost-benefit analysis of carbon emissions abatement.

Go to the Activity

Here is a step-by-step guide to using this lesson plan in the classroom/laboratory. We have suggested these steps as a possible plan of action. You may customize the lesson plan according to your preferences and requirements.

1 Introduce the topic with the help of a reading Introduce the topic of cost-benefit analysis and its principles by using the reading “An Introduction to Cost Benefit Analysis” from Thayer Watkins, Department of Economics, San Jose State University.
2 Discuss the topic in more detail by using another reading Next, introduce the economic analysis of climate change and discuss cost-benefit studies of global climate change by using the reading  in Ch. 2 (pg. 15-25) of “Economic Analysis of Climate Change: Cost-Benefit Studies of Global Climate Change” from “The Economics of Global Climate Change”.

Note: If the file is not properly readable in your browser, try to first download it and then open it. Download the file by using right-click on Windows or Control+click on Mac, followed by selecting "Save link as" on following link:
Download PDF File

This reading explores and compares the methodology used by various economic models for cost-benefit analysis of climate change.

The original reading in English, its French version is available here.

3 Conduct a Classroom/activity Now, explore the topic further through a hands-on activity, “Abating Carbon Emissions”, to perform cost-benefit analysis for carbon emissions abatement.

The classroom/laboratory activity “Abating Carbon Emissions” is developed by Gautam Sethi (Bard College), Curt Gervich (SUNY Plattsburgh), and Robyn Smyth (Bard College).

In this activity, carbon abatement is considered to be an action that will mitigate climate change, and the costs and benefits of abating carbon emissions are calculated.

Download the teaching materials and reading material, and conduct the activities as described in Part 1 and Part 2 of the unit 5.


Mapped Sustainable Development Goal(s), apart from 4 and 13

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