'This week marked the end of the Nobel season for another year. The Royal Swedish Academy of Sciences has awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred 2018 to two American economists – William Nordhaus,77, a professor of economics at Yale University, and Paul Romer, 62, an economics professor at the Stern School of Business at New York University – for their groundbreaking work on "long run macroeconomic analysis" of climate change and technology. The Nobel Committee recognized the Laureates with the theme "Countries around the globe must work together to combat the greatest environmental threat of our time'.
Nordhaus who has been called "the father of climate change economics", has developed a few models describing how global warming can be confronted. He is an ardent supporter of the widely used carbon tax, which includes inspecting the consequences of climate policy interventions.
On the other hand, Paul Romer, former Chief Economist of the World Bank published his "endogenous growth theory" in 1990, contributing an enormous amount of new research in regulations and policies that encourage new thoughts and long-term prosperity. In a recent conference, he commented that his research left him optimistic that the society can succeed in solving a threat like global warming.
The prestigious award was declared just hours after the special report published by the United Nation's Climate Science Body, Intergovernmental Panel on Climate Change (IPCC). The 782-page report stated that a 2°C of global warming, above pre-industrial temperatures, would be even worse for humanity than warming by 1.5°C, and that we may only have 12 years to get on track. It has explicitly referred to the "integrated assessment model" of Nordhaus.
According to the Nobel Committee, the contributions of Paul Romer and William Nordhaus are methodological, because it gives fundamental insights into the causes and consequences of technological innovation and climate change, and the ways to achieve sustainable global economic growth.
Renowned economists including Harvard economist Gernot Wagner, Professor Justin Wolfers of the University of Michigan, Oxford University researcher Max Roser highly applauded the timing and combination of Nordhaus' and Romer's work.
Numerous economists and scientists believe that their work has altogether widened the extent of economic analysis by constructing models that clarify how the market economy interacts with nature and information. They are hopeful that climate change can be settled if all come forward together. However, many governments seem to be still not ready nor interested in dealing with the repercussions of climate change.
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