Americans win Nobel for work on climate and growth

Source: By Jim Heintz and David Keyton, Associated Press • Posted: Tuesday, October 9, 2018

Two Americans won the Nobel Memorial Prize in Economic Sciences today, one for studying the economics of climate change and the other for showing how to help foster the innovation needed to solve such a problem.

William Nordhaus of Yale University and Paul Romer of New York University will share the 9 million-kronor ($1.01 million) award, the Royal Swedish Academy of Sciences said.

Nordhaus has called for the world to combat climate change by imposing a universal tax on carbon. The tax would make polluters pay for the costs their emissions impose on society. By using a tax rather than government edicts to slash emissions, the policy encourages companies to find innovative ways to reduce pollution.

Romer has studied the way innovation drives prosperity and has looked at ways to encourage it. He told a news conference today that his research had given him hope that people can solve even a problem as difficult as a warming planet.

“Many people think that dealing with protecting the environment will be so costly and so hard that they just want to ignore the problem, they want to deny it exists, they can’t deal with it,” Romer said. “I hope the prize today could help everyone see that humans are capable of amazing accomplishments when we set about trying to do something.”

While the two academics worked separately, their research dovetails on an issue that has become increasingly pressing. The question of climate change remains politically sensitive, especially in big oil-producing countries like the United States.

“It’s an ingenious pairing,” said David Warsh, author of the 2007 book “Knowledge and the Wealth of Nations” about Romer. “Nordhaus has been concerned all along with repairing the damage” to the global environment. “Romer has been writing about the means at your disposal” to attack such a technological challenge.

Per Stromberg, head of the Nobel economics prize committee, said the award is “about the long-run future of the world economy.”