Climate change economists win Nobel prize

Americans William D Nordhaus and Paul M Romer win 2018 Nobel Prize in Economics

The Royal Swedish Academy of Sciences said in a statement: "William D. Nordhaus and Paul M. Romer have designed methods for addressing some of ourtime's most basic and pressing questions about how we create long-term sustained and sustainableeconomic growth".

The prize money of 9 million Swedish krona ($1 million) will be split equally between the winners.

The applications of the model for the carbon tax has been criticized for several reasons, though.

Romer is one of the pioneers of the "endogenous growth theory", or the idea that economic growth is best driven by some of the most organic forces in a market: its people.

The two economists have not worked together, but the Nobel committee said their achievements are similar because they each built valuable economic models to study global problems.

"In selecting doctors Romer and Nordhaus, the Royal Swedish Academy of Sciences has recognized economic research that is, in its essence, an optimistic view of the power of economic theory", President Andrew Hamilton said in a press conference at the Kaufman Management Center. "I hope the prize today could help everyone see that humans are capable of wonderful accomplishments".

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.

In some sense what both Bill Nordhaus and I have been thinking about is the process of science. "But I'm extremely confident it will happen". It warned the panel of dire consequences from climate change and urged governments to respond to global warning with greater urgency.

In scholarly work done more than three decades ago, economist Paul Romer proposed that societies look beyond the material drivers of long-term growth, such as oil, ports, or labor. Its latest report noted Nordhaus in its research. Carbon dioxide spews into the atmosphere when fossil fuels are burned, with the heat-trapping "greenhouse gas" pegged as the culprit for the Earth's warming.

Nordhaus shared the prize with Paul Romer, professor of economics at New York University's Leonard N. Stern School of Business. "Instead of treating it like the weather, we can treat [technology] as something that we control". He supports this prediction by reflecting on the United Nations agreements to address substances that were causing an ozone hole, such as chlorofluorocarbons, "there were many people saying this would be enormously expensive and hard and then once we actually set about reducing emissions of chlorofluorocarbons it was a non-event". Seas would rise almost 4 inches (0.1 meters) less. The social cost of carbon should be spread fairly. Carbon tax policies are created to lead companies to find new ways to reduce pollution. The metric is increasingly used when implementing climate change policies. Assessing the impact of technological innovation, he concluded that unregulated economies fail to encourage enough research and development to support lasting growth.

Governments have the power to promote or discourage innovation through policy.

One of Romer's insights was that ideas differ from other goods or services.

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