U.S. economists win Nobel prize for work on climate and sustainable growth

Gladys Abbott
October 11, 2018

Romer, he said, has been writing about the methods available to deal with such a technological challenge.

The prize announcement came as the United Nations warned in a landmark report that an "unprecedented" transformation of society and the world economy was needed to avoid global climate chaos.

Sunday's report from the U.N.'s Intergovernmental Panel on Climate Change declared that managing climate change could prove a matter of life and death. The social cost of carbon should be spread fairly. Working separately from Romer, he showed that "the most efficient remedy for problems caused by greenhouse gases is a global scheme of universally imposed carbon taxes".

Many economists have since endorsed the concept of taxing carbon and using this financial lever to influence societal behaviour. "They have also taken macroeconomics to a global scale, to tackle some of the world's biggest problems", the Nobel Prize committee said.

In July, the GOP-controlled House voted for a resolution rejecting carbon taxes as detrimental to the US economy.

At a separate news conference at Yale, Nordhaus suggested that there was "pretty widespread acceptance" of climate change science outside the United States, and he expressed optimism that the United States would come around. Many Republicans in Congress have also expressed skepticism about whether or how much human beings are contributing to global warming and whether the US government ought to take steps to address it. This is important because it demonstrates to governments and policymakers that sustainable growth is achievable by directing resources and investment internally towards drivers of technological innovation, such as education and research.

It was widely tipped that research on the climate or development and the impact on the global economy would win the accolade.

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Governments have the power to promote or discourage innovation through policy. While capital and labour are "rival goods", in the sense that their use in the generation of value at one place precludes their use for generation of value elsewhere, while ideas are "non-rival goods", the same idea can produce value at multiple locations, unless restrictions are put on their access.

"The reason is, if you look around, who are we talking about?" After doing graduate work at MIT and Queens University, he received a doctorate in economics from the University of Chicago in 1983. This year's Laureates do not deliver conclusive answers, but their findings have brought us considerably closer to answering the question of how we can achieve sustained and sustainable global economic growth. Last year's prize went to American Richard Thaler for studying how human irrationality affects economic theory.

Annual prizes for achievements in physics, chemistry, medicine, peace and literature were established in the will of Alfred Nobel, the Swedish inventor of dynamite, who died in 1896.

CORRECTS SOURCE ON IMAGE TO BBVA FOUNDATION FRONTIERS OF KNOWLEDGE AWARDS FROM YALE UNIVERSITY - In this undated photo provided by BBVA Foundation Frontiers of Knowledge Award, William Nordhaus, of Yale University, poses for a photograph.

Romer is now on leave from Stern, which he joined in 2010, and in the past taught undergraduates at NYU's Shanghai campus.

Paul Romer, a former assistant professor of economics at the University of Rochester and now a professor at New York University, has been named a recipient of this year's Nobel Prize in Economic Sciences.

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