William Nordhaus during Nobel press conference in Stockholm, December 2018
William Dawbney Nordhaus
May 31, 1941
|Education|| Yale University (BA, MA)|
Massachusetts Institute of Technology (PhD)
|Awards|| BBVA Foundation Frontiers of Knowledge Award (2017)|
Nobel Memorial Prize in Economic Sciences (2018)
|Thesis||A theory of endogenous technological change (1967)|
|Doctoral advisor||Robert Solow|
William Dawbney Nordhaus (born May 31, 1941) is an American economist and Sterling Professor of Economics at Yale University, best known for his work in economic modelling and climate change. He is one of the laureates of the 2018 Nobel Memorial Prize in Economic Sciences.Nordhaus received the prize "for integrating climate change into long-run macroeconomic analysis".
An economist is a practitioner in the social science discipline of economics.
Sterling Professor is the highest academic rank at Yale University, awarded to a tenured faculty member considered one of the best in his or her field. It is akin to the rank of university professor at other universities.
Yale University is a private Ivy League research university in New Haven, Connecticut. Founded in 1701, it is the third-oldest institution of higher education in the United States and one of the nine Colonial Colleges chartered before the American Revolution.
Nordhaus was born in Albuquerque, New Mexico, the son of Virginia (Riggs) and Robert J. Nordhaus,who co-founded the Sandia Peak Tramway. Robert J. Nordhaus was from a German Jewish family — his father Max Nordhaus (1865–1936) immigrated from Paderborn in 1883 and was a manager of The Charles Ilfeld Company branch in Albuquerque.
The Sandia Peak Tramway is an aerial tramway located adjacent to Albuquerque, New Mexico, USA. It stretches from the northeast edge of the city to the crestline of the Sandia Mountains and has the world's third longest single span. It is the longest aerial tram in the United States.
Paderborn is a city in eastern North Rhine-Westphalia, Germany, capital of the Paderborn district. The name of the city derives from the river Pader and "born", an old German term for the source of a river. The river Pader originates in more than 200 springs near Paderborn Cathedral, where St. Liborius is buried.
Nordhaus graduated from Phillips Academy in Andover and subsequently received his BA and MA from Yale in 1963 and 1973, respectively, where he was a member of Skull and Bones.He also holds a Certificat from the Institut d'Etudes Politiques (1962) and a PhD from MIT (1967). He was a Visiting Fellow of Clare Hall, Cambridge in 1970-1971. He has been a member of the faculty at Yale since 1967, in both the Economics department and the School of Forestry and Environmental Studies, and has also served as its Provost from 1986–1988 and its Vice President for Finance and Administration from 1992–1993. His tenure as provost was among the shortest in the university's history. He has been on the Brookings Panel on Economic Activity since 1972. During the Carter administration, from 1977–1979, Nordhaus was a member of the Council of Economic Advisers. Nordhaus served as the chairman of the Board of Directors of the Boston Federal Reserve Bank between 2014 and 2015.
Phillips Academy Andover is a co-educational university-preparatory school for boarding and day students in grades 9–12, along with a post-graduate (PG) year. The school is in Andover, Massachusetts, United States, 25 miles north of Boston. Phillips Academy has 1,150 students, and is a highly selective school, accepting 13% of applicants with a yield as high as 86%. It is part of the Eight Schools Association, Ten Schools Admissions Organization as well as the G20 Schools Group.
Andover is a town in Essex County, Massachusetts, United States. It was settled in 1642 and incorporated in 1646. As of the 2010 census, the population was 33,201. It is part of the Boston-Cambridge-Quincy, Massachusetts-New Hampshire metropolitan statistical area. Part of the town comprises the census-designated place of Andover. It is twinned with its namesake: Andover, Hampshire, England.
A Bachelor of Arts is a bachelor's degree awarded for an undergraduate course or program in either the liberal arts, sciences, or both. Bachelor of Arts programs generally take three to four years depending on the country, institution, and specific specializations, majors, or minors. The word baccalaureus should not be confused with baccalaureatus, which refers to the one- to two-year postgraduate Bachelor of Arts with Honors degree in some countries.
Nordhaus lives in New Haven, Connecticut, with his wife, Barbara, a social worker in the Yale Child Study Center.
New Haven is a coastal city in the U.S. state of Connecticut. It is located on New Haven Harbor on the northern shore of Long Island Sound in New Haven County, Connecticut, and is part of the New York metropolitan area. With a population of 129,779 as determined by the 2010 United States Census, it is the second-largest city in Connecticut after Bridgeport. New Haven is the principal municipality of Greater New Haven, which had a total population of 862,477 in 2010.
Connecticut is the southernmost state in the New England region of the United States. As of the 2010 Census, it has the highest per-capita income, Human Development Index (0.962), and median household income in the United States. It is bordered by Rhode Island to the east, Massachusetts to the north, New York to the west, and Long Island Sound to the south. Its capital is Hartford and its most populous city is Bridgeport. It is part of New England, although portions of it are often grouped with New York and New Jersey as the Tri-state area. The state is named for the Connecticut River which approximately bisects the state. The word "Connecticut" is derived from various anglicized spellings of an Algonquian word for "long tidal river".
The Yale Child Study Center is a department at the Yale University School of Medicine. The center conducts research and provides clinical services and medical training related to children and families. Topics of investigation include autism and related disorders, Tourette syndrome, other pediatric mental health concerns, parenting, and neurobiology.
Nordhaus is the author or editor of over 20 books. He is the co-author of the textbook Economics , the original editions of which were written by fellow Nobel Laureate Paul Samuelson. The book is currently in its 19th edition and has been translated into at least 17 other languages.
Economics is an introductory textbook by American economists Paul Samuelson and William Nordhaus. It was first published in 1948, and has appeared in nineteen different editions, the most recent in 2009. It was the best selling economics textbook for many decades and still remains popular, selling over 300,000 copies of each edition from 1961 through 1976. The book has been translated into forty-one languages and in total has sold over four million copies.
Paul Anthony Samuelson was an American economist and the first American to win the Nobel Memorial Prize in Economic Sciences. The Swedish Royal Academies stated, when awarding the prize in 1970, that he "has done more than any other contemporary economist to raise the level of scientific analysis in economic theory". Economic historian Randall E. Parker has called him the "Father of Modern Economics", and The New York Times considered him to be the "foremost academic economist of the 20th century".
He has also written several books on global warming and climate change, one of his primary areas of research. Those books include Managing the Global Commons: The Economics of Climate Change (1994), which won the 2006 Award for "Publication of Enduring Quality" from the Association of Environmental and Resource Economics. Another book, with Joseph Boyer, is Warming the World: Economic Models of Global Warming (2000). His most recent book is The Climate Casino: Risk, Uncertainty, and Economics for a Warming World.
Global warming is a long-term rise in the average temperature of the Earth's climate system, an aspect of climate change shown by temperature measurements and by multiple effects of the warming. Though earlier geological periods also experienced episodes of warming, the term commonly refers to the observed and continuing increase in average air and ocean temperatures since 1900 caused mainly by emissions of greenhouse gasses in the modern industrial economy. In the modern context the terms global warming and climate change are commonly used interchangeably, but climate change includes both global warming and its effects, such as changes to precipitation and impacts that differ by region. Many of the observed warming changes since the 1950s are unprecedented in the instrumental temperature record, and in historical and paleoclimate proxy records of climate change over thousands to millions of years.
Climate change occurs when changes in Earth's climate system result in new weather patterns that last for at least a few decades, and maybe for millions of years. The climate system is comprised of five interacting parts, the atmosphere (air), hydrosphere (water), cryosphere, biosphere, and lithosphere. The climate system receives nearly all of its energy from the sun, with a relatively tiny amount from earth's interior. The climate system also gives off energy to outer space. The balance of incoming and outgoing energy, and the passage of the energy through the climate system, determines Earth's energy budget. When the incoming energy is greater than the outgoing energy, earth's energy budget is positive and the climate system is warming. If more energy goes out, the energy budget is negative and earth experiences cooling.
In 1972 Nordhaus, along with fellow Yale economics professor James Tobin, published Is Growth Obsolete?,an article that introduced the Measure of Economic Welfare (Index of Sustainable Economic Welfare) as the first model for economic sustainability assessment.
Nordhaus is also known for his critique on current measures of national income. He wrote, "If we are to obtain accurate estimates of the growth of real incomes over the last century, we must somehow construct price indexes that account for the vast changes in the quality and range of goods and services that we consume, that somehow compare the services of horse with automobile, of Pony Express with facsimile machine, of carbon paper with photocopier, of dark and lonely nights with nights spent watching television, and of brain surgery with magnetic resonance imaging" (1997, 30).
Palda summarizes the importance of Nordhaus' insight as follows: "The practical lesson to be drawn from this fascinating study of lighting is that the way we measure the consumer price index is severely flawed. Instead of putting goods and their prices directly into the index we should reduce all goods to their constituent characteristics. Then we should evaluate how these goods can best be combined to minimize the cost of consuming these characteristics. Such an approach would allow us to include new goods in the consumer price index without worrying about whether the index of today is comparable to that of ten years ago when the good did not exist. Such an approach would also allow governments to more precisely calculate the rate at which welfare and other forms of aid should be increased. At present such calculations tend to overestimate the cost of living because they do not take into account the manner in which increases in quality reduce the monetary cost of maintaining a certain standard of living."
Nordhaus has written on the economics of climate change. He is the developer of the DICE and RICE models, integrated assessment models of the interplay between economics, energy use, and climate change.
A Question of Balance: Weighing the Options on Global Warming Policies ISBN 978-0-300-13748-4 was published by Yale University Press on June 24, 2008.
In Reflections on the Economics of Climate Change (1993), he states: "Mankind is playing dice with the natural environment through a multitude of interventions – injecting into the atmosphere trace gases like the greenhouse gases or ozone-depleting chemicals, engineering massive land-use changes such as deforestation, depleting multitudes of species in their natural habitats even while creating transgenic ones in the laboratory, and accumulating sufficient nuclear weapons to destroy human civilizations."Under the climate change models he has developed, in general those sectors of the economy that depend heavily on unmanaged ecosystems – that is, are heavily dependent upon naturally occurring rainfall, runoff, or temperatures – will be most sensitive to climate change. Agriculture, forestry, outdoor recreation, and coastal activities fall in this category." Nordhaus takes seriously the potentially catastrophic impacts of climate change.
Nordhaus, who has done several studies on the economics of global warming, criticized the Stern Review for its use of a low discount rate:
The Review's unambiguous conclusions about the need for extreme immediate action will not survive the substitution of discounting assumptions that are consistent with today's market place. So the central questions about global-warming policy – how much, how fast, and how costly – remain open. The Review informs but does not answer these fundamental questions.
In 2013, Nordhaus chaired a committee of the National Research Council that produced a report discounting the impact of fossil fuel subsidies on greenhouse gas emissions.
However, in a December 2016 discussion paper for the Cowles Foundation, his research using the updated DICE model "...confirms past estimates of likely rapid climate change over the next century if there are not major climate-change policies. It suggests that it will be extremely difficult to achieve the 2°C target of international agreements even if ambitious policies are introduced in the near term. The required carbon price needed to achieve current targets has risen over time as policies have been delayed."
Among many honors, he is a Member of the United States National Academy of Sciences and an Elected Fellow of the American Academy of Arts and Sciences.He has been a foreign member of the Royal Swedish Academy of Engineering Sciences since 1999.
In 2004, Nordhaus was designated a Distinguished Fellow of the American Economic Association (AEA), along with George P. Shultz and William A. Brock.The accompanying AEA statement referred to his "knack for asking large questions about the measurement of economic growth and well-being, and addressing them with simple but creative insights," among them, his pioneering work on the political business cycle, ways of using national income accounts data to devise economic measures reflecting better health, increases in leisure and life expectancy, and "constructing integrated economic and scientific models to determine the efficient path for coping with climate change". In 2013, Nordhaus became president-elect of the AEA, and served as the association's president between 2014 and 2015.
Nordhaus was awarded the Nobel Memorial Prize in Economic Sciences in 2018. He shared the award with Paul Romer.In detailing its reasons for giving the prize to Nordhaus, the Royal Swedish Academy of Sciences specifically recognized his efforts to develop "an integrated assessment model , i.e. a quantitative model that describes the global interplay between the economy and the climate. His model integrates theories and empirical results from physics, chemistry and economics. Nordhaus' model is now widely spread and is used to simulate how the economy and the climate co-evolve."
Many of the news outlets that reported on Nordhaus's prize noted that he was in the advance wave of economists who embraced a carbon tax as a preferred method of carbon pricing.Some climate scientists and commentators were disappointed with the Nobel Prize going to Nordhaus due to his embrace of substantially lower carbon taxes per ton than most scientists, along with his past history of minimal carbon taxes.
James Tobin was an American economist who served on the Council of Economic Advisers and the Board of Governors of the Federal Reserve System, and taught at Harvard and Yale Universities. He developed the ideas of Keynesian economics, and advocated government intervention to stabilize output and avoid recessions. His academic work included pioneering contributions to the study of investment, monetary and fiscal policy and financial markets. He also proposed an econometric model for censored endogenous variables, the well-known "Tobit model". Tobin received the Nobel Memorial Prize in Economic Sciences in 1981.
William Spencer Vickrey was a Canadian-born professor of economics and Nobel Laureate. Vickrey was awarded the 1996 Nobel Memorial Prize in Economic Sciences with James Mirrlees for their research into the economic theory of incentives under asymmetric information, becoming the only Nobel laureate born in British Columbia.
A carbon tax is a tax levied on the carbon content of fuels. It is a form of carbon pricing. Carbon is present in every hydrocarbon fuel and converted to carbon dioxide and other products when combusted. In contrast, non-combustion energy sources—wind, solar, geothermal, hydropower, and nuclear—do not convert hydrocarbons to CO
Robert Merton Solow, GCIH, is an American economist, particularly known for his work on the theory of economic growth that culminated in the exogenous growth model named after him. He is currently Emeritus Institute Professor of Economics at the Massachusetts Institute of Technology, where he has been a professor since 1949. He was awarded the John Bates Clark Medal in 1961, the Nobel Memorial Prize in Economic Sciences in 1987, and the Presidential Medal of Freedom in 2014. Four of his PhD students, George Akerlof, Joseph Stiglitz, Peter Diamond and William Nordhaus later received Nobel Memorial Prizes in Economic Sciences in their own right.
Thomas Crombie Schelling was an American economist and professor of foreign policy, national security, nuclear strategy, and arms control at the School of Public Policy at University of Maryland, College Park. He was also co-faculty at the New England Complex Systems Institute. He was awarded the 2005 Nobel Memorial Prize in Economic Sciences for "having enhanced our understanding of conflict and cooperation through game-theory analysis."
Ross McKitrick is a Canadian economist specializing in environmental economics and policy analysis. He is a professor of economics at the University of Guelph, and a senior fellow of the Fraser Institute.
Nicholas Herbert Stern, Baron Stern of Brentford, is a British economist and academic.
William Aaron Nierenberg was an American physicist who worked on the Manhattan Project and was director of the Scripps Institution of Oceanography from 1965 through 1986. He was a co-founder of the George C. Marshall Institute in 1984.
Paul Michael Romer is an American economist, a pioneer of endogenous growth theory, and a co-recipient of the 2018 Nobel Memorial Prize in Economic Sciences. He received the prize "for integrating technological innovations into long-run macroeconomic analysis".
Christopher Albert "Chris" Sims is an American econometrician and macroeconomist. He is currently the John J.F. Sherrerd ’52 University Professor of Economics at Princeton University. Together with Thomas Sargent, he won the Nobel Memorial Prize in Economic Sciences in 2011. The award cited their "empirical research on cause and effect in the macroeconomy".
The Stern Review on the Economics of Climate Change is a 700-page report released for the Government of the United Kingdom on 30 October 2006 by economist Nicholas Stern, chair of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics (LSE) and also chair of the Centre for Climate Change Economics and Policy (CCCEP) at Leeds University and LSE. The report discusses the effect of global warming on the world economy. Although not the first economic report on climate change, it is significant as the largest and most widely known and discussed report of its kind.
Robert O. Mendelsohn is an American environmental economist. He is currently the Edwin Weyerhaeuser Davis Professor of the School of Forestry and Environmental Studies at Yale University, Professor of Economics in Economics Department at Yale University and Professor in the School of Management at Yale University. Professor Mendelsohn is a major figure in the economics of global warming, being for example a contributor to the first Copenhagen Consensus report. Mendelsohn received a BA in economics from Harvard University in 1973 and obtained his Ph.D. in economics from Yale University in 1978.
Carbon pricing — the method favored by many economists for reducing global-warming emissions — charges those who emit carbon dioxide (CO2) for their emissions. That charge, called a carbon price, is the amount that must be paid for the right to emit one tonne of CO2 into the atmosphere. Carbon pricing usually takes the form either of a carbon tax or a requirement to purchase permits to emit, generally known as cap-and-trade, but also called "allowances".
Stephen DeCanio is a Professor of economics, emeritus, at the University of California, Santa Barbara. His current research deals with the impact of Artificial Intelligence on society, the economy, and culture. His recent research has also addressed the consequences of computational limits for economics and social theory more generally. He has published books and articles in the fields of global environmental protection and energy economics, the theory of the firm, and economic history. After receiving his Ph.D from the Massachusetts Institute of Technology in 1972, he taught at Tufts University and Yale University before joining the faculty at the UCSB in 1978. From 1986 to '87 he was the Senior Staff Economist at the President's Council of Economic Advisors. He was also a member of the United Nations Environment Programme Economic Options Panel, which reviewed the economic aspects of the Montreal Protocol on Substances that Deplete the Ozone Layer.
Ottmar Georg Edenhofer is one of the world's leading experts on climate change policy, environmental and energy policy, and energy economics. Edenhofer currently holds the professorship of the Economics of Climate Change at the Technical University of Berlin. He is designated director and chief economist of the Potsdam Institute for Climate Impact Research (PIK) as well as director of the Mercator Research Institute on Global Commons and Climate Change (MCC). From 2008 to 2015 he served as one of the co-chairs of the Intergovernmental Panel on Climate Change (IPCC) Working Group III "Mitigation of Climate Change".
Dieter Robin Helm CBE is a British economist and academic.
The Dynamic Integrated Climate-Economy model, referred to as the DICE model or Dice model, is a computer-based integrated assessment model developed by 2018 Nobel Laureate William Nordhaus that “integrates in an end-to-end fashion the economics, carbon cycle, climate science, and impacts in a highly aggregated model that allows a weighing of the costs and benefits of taking steps to slow greenhouse warming." Nordhaus also developed the RICE model, a variant of the DICE model that was updated and developed alongside the DICE model. Researchers who collaborated with Nordhaus to develop the model include David Popp, Zili Yang, and Joseph Boyer.
The Economists' Statement on Climate Change was published in 1997, prior to the Kyoto Protocol negotiated that same year, to promote market-based solutions to climate change. It was signed by more than 2,600 economists, including 19 Nobel Prize laureates, and remains the largest public statement in the history of the economics profession.
Adele Cecile Morris is a senior fellow and policy director for Climate and Energy Economics at the Brookings Institution. Her expertise and interests include the economics of policies related to climate change, energy, natural resources, tax policy, and public finance. She was an unpaid advisor to the Hillary for America campaign.
The Special Report on Global Warming of 1.5 °C (SR15) was published by the Intergovernmental Panel on Climate Change (IPCC) on 8 October 2018. The report, approved in Incheon, South Korea, includes over 6,000 scientific references, and was prepared by 91 authors from 40 countries. In December 2015, the 2015 United Nations Climate Change Conference called for the report. The report was delivered at the United Nations' 48th session of the IPCC to "deliver the authoritative, scientific guide for governments" to deal with climate change.
Mr Nordhaus was an early advocate of carbon taxes, but the committee noted that the models he developed also allowed policymakers to calculate quantitative paths for the best tax showing how they would depend on [assumptions regarding the values of disparate climate and economic variables].
The Yale economist William D. Nordhaus has spent the better part of four decades trying to persuade governments to address climate change, preferably by imposing a tax on carbon emissions. His careful work has long since convinced most members of his own profession . ...
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| President of the American Economic Association |