He is receiving the prize “for integrating climate change into long-run macroeconomic analysis.” Nordhaus’ findings deal with interactions between society and the climate. He started working on this topic in the 1970s when there was increasing concern among scientists about the combustion of fossil fuels raising the Earth’s temperature.
In the mid-1990s he became the first person to create an integrated assessment model, a quantitative model that describes the interplay between the economy and the climate. William D. Nordhaus’ model integrates theories and empirical results from physics, chemistry and economics. The model is now widely spread and is used to simulate how the economy and the climate interact over time. It makes it possible to study the consequences of climate policy control mechanisms, such as carbon taxes, under various scientific conditions.
William D. Nordhaus was elected as an international member of IVA in 1999.
He shares the prize with Paul M. Romer, NYU Stern School of Business, New York, USA “for integrating technological innovations into long-run macroeconomic analysis.”
Photo: Yale University