GOATOMICS: WILLIAM NORDHAUS

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William Nordhaus is an American economist who was awarded the 2018 Nobel Price for Economics for his contributions to the study of long-term economic growth and its relation to climate change. His pioneering work on climate economy models greatly advanced understanding of the complex interactions between climate change and human economic activities and provided a sound scientific foundation for climate policy prescriptions discussed in international fora (such as the Intergovernmental Panel on Climate Change) and adopted in many industrial countries since the late 20th century.

He was born in Albuquerque on May 31, 1941. He graduated with B.A degree from Yale University in 1963 and in 1967 he received a Ph.D. in economics from the Massachusetts Institute of Technology (MIT). He spent his subsequent teaching career at Yale University, eventually becoming Sterling Professor of Economics and a professor in Yale’s School of Forestry and Environmental Studies.

William Nordhaus studied how the global economy affects and is affected by human-caused climate change, focusing on modifications in earth’s climate that result from activities that lead to the continued widespread burning of fossil fuels, increase atmospheric concentrations of carbon dioxide (CO₂) and greenhouse gases that cause in rising global average temperatures or commonly known as global warming, in the beginning of 1970s. He invented models of economic climate system to capture such interactions, which was later referred to as Integrated Assessment Models (IAMs). The model combines basic theories and results from physics and chemistry and showed how the global economy and climate would evolve under different assumptions about the pace and mechanisms of global warming and the additional climate policies such as carbon taxes or emission quotas at varying rates and analyzed the policy that government might adopt.

Nordhaus quantified the long-run economic costs and benefits of various possible scenarios, including business as usual and showed that human welfare, including the welfare of future generations, would be maximized by a scheme of carbon taxes uniformly imposed upon all countries (Kungl Vetenskaps Akademien, 2018). He also calculated the carbon tax rate that would be necessary to maximize human welfare under an alternative conception that placed greater emphasis on the welfare of future generations and the rate necessary to prevent a global average temperature rise of more than 2.5 °C (4.5 °F) by 2100 (relative to the average temperature in 1900) while minimizing welfare costs.

William Nordhaus has several publications, included A Question of Balance: Weighing the Options on Global Warming Policies (2008), The Climate Casino: Risk, Uncertainty, and Economics for a Warming World (2013), and other scholarly papers.

REFERENCES

Duignan, B. (2021, May 27). William Nordhaus. Encyclopedia Britannica. https://www.britannica.com/biography/William-Nordhaus

Kungl Vetenskaps Akademien (2018) ‘The Prize in Economic Sciences 2018 Integrating innovation and climate with economic growth’, Press Release, p. 50005. Available at: https://www.nobelprize.org/uploads/2018/10/press-economicsciences2018.pdf.