Long-term asset pricing and sustainability

BEA527 Long-term asset pricing and sustainability

Spring 2024

Autumn 2024
  • Topics

    This course aims at providing science-based instruments to assist public and private decision makers in their evaluation of actions and policies in the face of long-term global risks. How should we manage nuclear wastes? How should we price greenhouse gases? What is the optimal capacity of intensive care units in hospitals in the face of the next "black death" pandemic? I will show standard asset pricing theories can be extended to extreme risks and very long time horizons to translate our responsibility towards future generations and the notion of sustainability into practical evaluation tools such as risk-adjusted discount rates (ineffectively) used by corporations and evaluators of public investment projects around the world.

    This course will be mostly about how one should value investments from the viewpoint of the public good, i.e., including environmental externalities and secular impacts. I will also talk about climate finance, including the concepts of CSR and ESG criteria, and how firms and markets actually value green investments.

  • Learning outcome

    At the end of the course, students will:


    • have in-depth knowledge of the fundamental principles of asset pricing and their application to the social cost of carbon


    • be able to apply these principles to the evaluation of public investment projects and policy evaluation

    General competence

    • have competence   in addressing ethical issues associated to the use of cost-benefit analysis and its link with our responsibilities towards future generations, and with sustainability issues

  • Teaching

    Intensive course from March 19 to March 22. The course is compressed and delivered as regular lectures. Four hours each day over four days.

  • Restricted access

    • PhD candidates at NHH
    • PhD candidates at Norwegian institutions
    • PhD candidates at other institutions
    • PhD candidates from the ENGAGE.EU alliance
    • Motivated master’s students may be admitted after application, but are subject to the approval from the course responsible on a case by case basis

  • Recommended prerequisites

    Students should have good knowledge of microeconomic concepts and tools at the intermediate level.

  • Credit reduction due to overlap


  • Compulsory Activity


  • Assessment

    One written individual assignment. To be handed in by April 10.

  • Grading Scale


  • Literature

    Drupp, Moritz A., Mark C. Freeman, Ben Groom, and Frikk Nesje, (2018), Discounting Disentangled, American Economic Journal: Economic Policy, 10 (4): 109-34.

    Gollier, Christian, (2017), Ethical asset valuation and the good society, Columbia University Press, October 2017, 248 pages. Translated in French (Gollier, 2020).

    Gollier, Christian, (2012), Pricing the planet's future: The economics of discounting in an uncertain world, Princeton University Press, October 2012.

    Gollier, Christian, (2016), Evaluation of long-dated assets : The role of parameter uncertainty,  Journal of Monetary Economics 84, 66-83.

    Gollier, C., R. van der Ploeg and J. Zheng, (2024), The discounting premium puzzle: Survey evidence from professional economists, Journal of Environmental Economics and Management (forthcoming).

  • This is an ENGAGE-course

    This course is offered to PhD candidates from the ENGAGE.EU alliance.


ECTS Credits
Teaching language

Spring. Offered spring 2024

Course responsible

Professor Christian Gollier, Toulouse School of Economics.

Internal contact person, Professor Gunnar Eskeland.