2018 Nobel in Economics Is Awarded to William Nordhaus and Paul Romer

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“One problem today is that people think protecting the environment will be so costly and so hard that they want to ignore the problem and pretend it doesn’t exist,” Professor Romer said at a news conference after the announcement. “Humans are capable of amazing accomplishments if we set our minds to it.”

The day began with a little comedy, as the Swedes struggled to contact the winners.

Professor Romer said he heard his phone ring, twice, in the early morning hours, but he did not answer because he assumed it was a spam call. Then he checked caller ID and saw the call was from Sweden. So he called back and, after waiting on hold, learned he had won the Nobel Prize.

Professor Nordhaus said he slept in, only learning that he won the prize when his daughter called.

“She said, ‘It’s so nice!’” Professor Nordhaus recounted, “and I said, ‘What?’”

Professor Nordhaus, 77, graduated from Yale in 1963, earned a doctorate in economics from MIT in 1967 and then returned to Yale as a member of the economics faculty. He has been there ever since.

In the 1970s, amid rising concern about pollution, economists including Professor Nordhaus began to argue that taxation was the most effective remedy: The government should require polluters to pay for damage to the environment and to public health. The idea remains broadly popular among economists.

“There is basically no alternative to the market solution,” Professor Nordhaus said Monday.

To assess the costs of climate change, including crop failures and flooding, Professor Nordhaus developed an economic model he called the Dynamic Integrated Climate-Economy model, or DICE.

The name, he said, “consciously aimed to suggest that we are gambling with the future of our planet.”

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