Nordhaus PhD '67, a scholar known for his work on the long-term interaction of climate change and the economy, will share the 2018 Nobel Prize in economic sciences, the Royal Swedish Academy of Sciences announced today.
Nordhaus, 77, was specifically honored for "integrating climate change into long-run macroeconomic analysis".
The wide-ranging report from the Intergovernmental Panel on Climate Change - which has itself won a Nobel prize - cited Nordhaus in its research. Gradually, he developed models to guide policymakers in balancing the economic costs and the societal benefits of combating carbon emissions.
U.S. President Donald Trump has repeatedly called climate change a hoax, and previous year announced that he would withdraw the United States from a global pact to combat it reached in 2015, calling the deal's demands for emissions cuts too costly. "Humans are capable of wonderful accomplishments if we set our minds to it". His models showed how the economic forces, whether they be government decisions or market conditions, affect the development of new ideas and innovation, and that knowledge can drive economic growth. In 1990, he published his work which is the foundation of what is now called Endogenous Growth Theory.
The laureates of the Nobel Prize in Economics, William Nordhaus, left, and Paul Romer, are seen at a press conference at The Royal Swedish Academy of Sciences in Stockholm, on October 8, 2018.
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Romer told the Swedish academy in a live phone interview at the prize announcement that he was confident the world could reduce greenhouse gas emissions and still improve standards of living in the future.
The Economics Nobel is only informally called so and is not technically a Nobel award. Versions of a carbon tax have been used in Europe but have yet to be adopted in the United States. The prize in economic sciences was added by Sweden's central bank in 1968. Its supporters encourage governments and the private sector to foster innovation and incentives for increased creativity. His vision was to model new ideas as goods and services. Last year's economics prize went to alumnus Richard Thaler '74 (PhD), the Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the Booth School at the University of Chicago and one-time faculty member at what is now Rochester's Simon Business School.
One of the winners of this year's Nobel Prize in economics is the son of former Colorado Gov. Roy Romer.
The peace prize was awarded Friday to Denis Mukwege of Congo and Iraqi Nadia Murad for their work in drawing attention to how sexual violence is used as a weapon of war.