BREAKING NEWS: The Royal Swedish Academy of Sciences has decided to award the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2018 to William D. Nordhaus and Paul M. Romer. #NobelPrize https://t.co/xUs6iSyI7h
Two economists have been jointly awarded the 2018 Nobel Prize for Economic Sciences for their pioneering work on the understanding of climate change and sustainable development.
William Nordhaus and Paul Romer, both American, were announced as winners on Monday morning, for having "designed methods that address some of our time’s most fundamental and pressing issues: long-term sustainable growth in the global economy and the welfare of the world’s population."
Nordhaus's work has shown how economic activity reacts with basic chemistry and physics to produce climate change. His model to describe the relationship between the economy and climate is now widespread and has been influential in the development of policies such as carbon taxes.
Laureate William Nordhaus’ research shows that the most efficient remedy for problems caused by greenhouse gas emissions is a global scheme of carbon taxes uniformly imposed on all countries. The diagram shows CO2 emissions for four climate policies according to his simulations. https://t.co/tmxUE6MiLn
Romer is responsible for developing what is now known as "endogenous growth theory," which suggests that economic growth is generated within a system due to internal factors, such as new technology and improvements to efficiency.
"He demonstrated how economic forces govern the willingness of firms to produce new ideas and innovations," the Nobel committee said.
Nobel said in a statement, "The contributions of Paul Romer and William Nordhaus are methodological, providing us with fundamental insights into the causes and consequences of technological innovation and climate change.
"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."
The news comes on the same day a landmark report from the Intergovernmental Panel On Climate Change warned that any rise in global temperatures above 1.5 degrees Celsius could have catastrophic consequences.