Economics of climate change wins duo Nobel

STOCKHOLM: Americans William Nordhaus and Paul Romer, pioneers in adapting economic theory to take better account of environmental issues and technological progress, shared the 2018 Nobel Economics Prize on Monday. In an award that turned the spotlight on the global debate over risks associated with climate change, the Royal Swedish Academy of Sciences said the laureates’ work helped answer fundamental questions on how to promote long-term sustainable growth and enhance human welfare. The prize took Romer, of New York University’s Stern School of Business, by surprise. “I got two phone calls this morning, and I didn’t answer either one because I thought it was some spam call, so I wasn’t expecting the prize,” he said, while welcoming the chance to expand on his theory. “I think... many people think that protecting he environment will be so costly and so hard that they just want to ignore (this)...,” he told a news conference via phone link. “(But) we can absolutely make substantial progress protecting the environment and do it without giving up the chance to sustain growth.” Romer, of New York University’s Stern School of Business, had shown how economic forces govern the willingness of firms to produce new ideas and innovations, laying the foundations for a new model for development, known as endogenous growth theory. Nordhaus, of Yale University, was the first person to create a quantitative model that described the interplay between the economy and the climate. “Their findings have significantly broadened the scope of economic analysis by constructing models that explain how the market economy interacts with nature and knowledge,” the academy said in statement. — Reuters