US economists William Nordhaus and Paul Romer have won the 2018 Nobel Prize in Economic Sciences for work on “long-term sustainable growth in the global economy,” the Royal Swedish Academy of Sciences said.
“This year’s laureates have designed methods for addressing some of our time’s most basic and pressing questions about how we create long-term sustained and sustainable economic growth,” the academy said Monday.
“Their contributions provide us with fundamental insights into the causes and consequences of technological innovation and climate change.”
The tools the laureates have developed “are crucial for understanding how the economy interacts with nature and with knowledge and which policies help generate sustained and sustainable long-term economic growth.”
Nordhaus was awarded the prize “for integrating climate change into long-run macroeconomic analysis” and his model helps explain the interaction between the economy and climate.
“William Nordhaus’ research shows how economic activity interacts with basic chemistry and physics to produce climate change,” the academy said.
The announcement of this year’s economics winners comes as the Intergovernmental Panel on Climate Change (IPCC) released a special report warning “unprecedented changes” were needed to limit climate change as laid out in the Paris Agreement of 2015.
The Paris Agreement featured a global pledge effort to keep temperature increases below 2 degrees Celsius and to pursue efforts to limit that rise even further to 1.5 degrees, but the United States – a major CO2 emitter – pulled out of the deal in 2017, casting doubt on its efficacy.
While Romer’s work was focused on the role of technological advances, he chimed in on the topic of climate change in a call with journalists after the announcement of the award’s winners.
“It’s entirely possible for humans to produce less carbon,” he said. “There are some trade-offs but once we start and try and reduce carbon emissions we’ll be surprised that it wasn’t as hard as we anticipated.”
The economics prize is worth 9 million kronor (1 million dollars) this year, the same as the other Nobel Prizes awarded for medicine, physics, chemistry and peace. They were announced last week.
The literature prize announcement has been postponed until next year due to a crisis in the Swedish Academy.
With the exception of economics, the prizes were all endowed by Swedish industrialist Alfred Nobel (1833-96), the inventor of dynamite.
The economics award has predominately been given to US economists. Only one woman, Elinor Ostrom of the United States, has won to date.
The economics prize, which was not one of the original prizes mentioned in Nobel’s will, is formally called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. It was set up and funded by the Swedish central bank and first awarded in 1969.
The Nobel awards are set to be presented on December 10, the anniversary of Nobel’s death.