William Dawbney Nordhaus (born May 31, 1941) is an American
economist
An economist is a professional and practitioner in the social science discipline of economics.
The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this field there are ...
, a
Sterling Professor of Economics at
Yale University
Yale University is a Private university, private research university in New Haven, Connecticut. Established in 1701 as the Collegiate School, it is the List of Colonial Colleges, third-oldest institution of higher education in the United Sta ...
, best known for his work in
economic modeling and
climate change
In common usage, climate change describes global warming—the ongoing increase in global average temperature—and its effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes to ...
, and one of the 2 recipients of the 2018
Nobel Memorial Prize in Economic Sciences
The Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel ( sv, Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is an economics award administered ...
. Nordhaus received the prize "for integrating climate change into long-run
macroeconomic analysis".
Education and career
Nordhaus was born in Albuquerque, New Mexico, the son of Virginia (Riggs) and Robert J. Nordhaus, who co-founded the
Sandia Peak Tramway
The Sandia Peak Tramway is an aerial tramway located adjacent to Albuquerque, New Mexico. It stretches from the northeast edge of the city to Sandia Peak on the ridge line of the Sandia MountainsThe upper station of the tramway is at a point o ...
. Robert J. Nordhaus was from a German
Jewish
Jews ( he, יְהוּדִים, , ) or Jewish people are an ethnoreligious group and nation originating from the Israelites Israelite origins and kingdom: "The first act in the long drama of Jewish history is the age of the Israelites""The ...
family – his father Max Nordhaus (1865–1936) had immigrated from
Paderborn
Paderborn (; Westphalian: ''Patterbuorn'', also ''Paterboärn'') 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 t ...
in 1883, and became a manager of The Charles Ilfeld Company branch in Albuquerque.
Nordhaus graduated from
Phillips Academy in
Andover
Andover may refer to:
Places Australia
*Andover, Tasmania
Canada
* Andover Parish, New Brunswick
* Perth-Andover, New Brunswick
United Kingdom
* Andover, Hampshire, England
** RAF Andover, a former Royal Air Force station
United States
* Andove ...
and subsequently received his
BA and
MA from
Yale
Yale University is a private research university in New Haven, Connecticut. Established in 1701 as the Collegiate School, it is the third-oldest institution of higher education in the United States and among the most prestigious in the wor ...
in 1963 and 1973, respectively, where he was a member of
Skull and Bones
Skull and Bones, also known as The Order, Order 322 or The Brotherhood of Death, is an undergraduate senior secret student society at Yale University in New Haven, Connecticut. The oldest senior class society at the university, Skull and Bone ...
.
He also holds a Certificate from the
Institut d'Etudes Politiques
An institute is an organisational body created for a certain purpose. They are often research organisations (research institutes) created to do research on specific topics, or can also be a professional body.
In some countries, institutes can ...
(1962) and a
PhD from
MIT
The Massachusetts Institute of Technology (MIT) is a private land-grant research university in Cambridge, Massachusetts. Established in 1861, MIT has played a key role in the development of modern technology and science, and is one of the m ...
(1967).
He was a Visiting Fellow of Clare Hall, Cambridge
Clare Hall is a constituent college of the University of Cambridge, England. Founded in 1966 by Clare College, Clare Hall is a college for advanced study, admitting only postgraduate students alongside postdoctoral researchers and fellows. It ...
in 1970–1971. He has been a member of the faculty at Yale since 1967, in both the Economics department and the School of the Environment.[ Nordhaus also served as its Provost from 1986–1988 and its Vice President for Finance and Administration from 1992–1993. He has been on the Brookings Panel on Economic Activity since 1972. During the ]Carter
Carter(s), or Carter's, Tha Carter, or The Carter(s), may refer to:
Geography United States
* Carter, Arkansas, an unincorporated community
* Carter, Mississippi, an unincorporated community
* Carter, Montana, a census-designated place
* Carter ...
administration, from 1977–1979, Nordhaus was a member of the Council of Economic Advisers.[
Nordhaus was elected to the ]American Philosophical Society
The American Philosophical Society (APS), founded in 1743 in Philadelphia, is a scholarly organization that promotes knowledge in the sciences and humanities through research, professional meetings, publications, library resources, and communit ...
in 2013. He served as the chairman of the Board of Directors of the Boston Federal Reserve Bank between 2014 and 2015.
Nordhaus lives in New Haven
New Haven is a 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 City metropolitan area. With a population of 134,023 ...
, Connecticut
Connecticut () is the southernmost state in the New England region of the Northeastern 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 capita ...
, with his wife, Barbara, a social worker recently retired from the Yale Child Study Center
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 r ...
.[
]
Contributions to economics and the study of climate change
Nordhaus is the author or editor of over 20 books. One of his early works, he partnered with Paul Samuelson as a co-author for an introductory textbook entitled ''Economics''. Nordhaus worked alongside Samuelson from the 12th edition until the 19th, starting in 1985. It was first published in 1948 and has appeared in nineteen different editions and seventeen different languages. It was known as a best-selling economics textbook for decades and is still extremely popular today. ''Economics'' was called a “canonical textbook”, and the development of mainstream economic thought has been traced by comparing the nineteen editions over the 1948–2010 period.
He has also written several books on global warming
In common usage, climate change describes global warming—the ongoing increase in global average temperature—and its effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes to E ...
and climate change
In common usage, climate change describes global warming—the ongoing increase in global average temperature—and its effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes to ...
, 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), ''The Climate Casino: Risk, Uncertainty, and Economics for a Warming World''. His most recent book is ''The Spirit of Green'' (2021).
In 1972 Nordhaus, along with fellow Yale economics professor James Tobin
James Tobin (March 5, 1918 – March 11, 2002) was an American economist who served on the Council of Economic Advisers and consulted with the Board of Governors of the Federal Reserve System, and taught at Harvard and Yale Universities. He d ...
, published ''Is Growth Obsolete?'', an article that introduced the Measure of Economic Welfare
The Index of Sustainable Economic Welfare (ISEW) is an economic indicator intended to replace the gross domestic product (GDP), which is the main macroeconomic indicator of System of National Accounts (SNA).
Rather than simply adding together al ...
(Index of Sustainable Economic Welfare) as the first attempt to develop environmental accounting.
Nordhaus is also known for his critique of 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's 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."
Contributions on economics of climate change
Nordhaus has written on the economics
Economics () is the social science that studies the production, distribution, and consumption of goods and services.
Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analyzes ...
of climate change
In common usage, climate change describes global warming—the ongoing increase in global average temperature—and its effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes to ...
. 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'' was published by Yale University Press
Yale University Press is the university press of Yale University. It was founded in 1908 by George Parmly Day, and became an official department of Yale University in 1961, but it remains financially and operationally autonomous.
, Yale Universi ...
in 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."[Nordhaus, W. D. '"Reflections on the economics of climate change", '']Journal of Economic Perspectives
The ''Journal of Economic Perspectives'' (JEP) is an economic journal published by the American Economic Association. The journal was established in 1987. It is very broad in its scope. According to its editors its purpose is:
#to synthesize and ...
'' (1993); 7(4) 11–25 at pp. 11, 15 Under the climate change
In common usage, climate change describes global warming—the ongoing increase in global average temperature—and its effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes to ...
models he has developed, in general those sectors of the economy that depend heavily on unmanaged ecosystems
An ecosystem (or ecological system) consists of all the organisms and the physical environment with which they interact. These biotic and abiotic components are linked together through nutrient cycles and energy flows. Energy enters the syst ...
– 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.
In 2007, Nordhaus, who has done several studies on the economics of global warming
The economics of climate change concerns the economic aspects of climate change; this can inform policies that governments might consider in response. A number of factors make this and the politics of climate change a difficult problem: it is a l ...
, criticized the Stern Review
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 Environm ...
for its use of a low discount rate:
In 2013, Nordhaus chaired a committee of the National Research Council that produced a report discounting the impact of fossil fuel subsidies
Fossil fuel subsidies are energy subsidies on fossil fuels. They may be tax breaks on consumption, such as a lower sales tax on natural gas for residential heating; or subsidies on production, such as tax breaks on exploration for oil. Or ...
on greenhouse gas emissions.
In a January 2020 interview with '' Neue Zürcher Zeitung'', Nordhaus claimed that achieving the 2°C goal of the Paris agreement was "impossible", stating that "even if we make the fastest possible turn towards zero emissions, will continue to accumulate in the atmosphere, because we cannot simply shut down our economy". He asserted that he was not alone in making this assessment, claiming that half of the simulation arrived at the same conclusion. He also remarked that the two-degree target was set without reference to the costs of meeting the target.
Honors
Scientific and engineering academies
Among many honors, he is a Member of the United States National Academy of Sciences
The National Academy of Sciences (NAS) is a United States nonprofit, non-governmental organization. NAS is part of the National Academies of Sciences, Engineering, and Medicine, along with the National Academy of Engineering (NAE) and the Nati ...
, the American Philosophical Society, and an Elected Fellow of the American Academy of Arts and Sciences
The American Academy of Arts and Sciences (abbreviation: AAA&S) is one of the oldest learned societies in the United States. It was founded in 1780 during the American Revolution by John Adams, John Hancock, James Bowdoin, Andrew Oliver, a ...
.[ He has been a foreign member of the ]Royal Swedish Academy of Engineering Sciences
The Royal Swedish Academy of Engineering Sciences or ''Kungliga Ingenjörsvetenskapsakademien'' (IVA), founded on 24 October 1919 by King Gustaf V, is one of the royal academies in Sweden. The academy is an independent organisation, which prom ...
since 1999. He was awarded th
Daniel Patrick Moynihan Prize
by the American Academy of Political and Social Science in 2020.
American Economic Association
In 2004, Nordhaus was designated a Distinguished Fellow of the American Economic Association (AEA), along with George P. Shultz
George Pratt Shultz (; December 13, 1920February 6, 2021) was an American economist, businessman, diplomat and statesman. He served in various positions under two different Republican presidents and is one of the only two persons to have held fou ...
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
Well-being, or wellbeing, also known as wellness, prudential value or quality of life, refers to what is intrinsically valuable relative ''to'' someone. So the well-being of a person is what is ultimately good ''for'' this person, what is in th ...
, and addressing them with simple but creative insights," among them, his pioneering work on the political business cycle, ways of using national income accounts
The national income and product accounts (NIPA) are part of the national accounts of the United States. They are produced by the Bureau of Economic Analysis of the Department of Commerce. They are one of the main sources of data on general econ ...
data to devise economic measures reflecting better health, increases in leisure and life expectancy
Life expectancy is a statistical measure of the average time an organism is expected to live, based on the year of its birth, current age, and other demographic factors like sex. The most commonly used measure is life expectancy at birth ...
, 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.
Nobel Memorial Prize in Economics
Nordhaus was awarded the Nobel Memorial Prize in Economic Sciences
The Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel ( sv, Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is an economics award administered ...
in 2018, which he shared 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
A carbon tax is a tax levied on the carbon emissions required to produce goods and services. Carbon taxes are intended to make visible the "hidden" social costs of carbon emissions, which are otherwise felt only in indirect ways like more sev ...
as a preferred method of carbon pricing
Carbon pricing (or pricing), also known as cap and trade (CAT) or emissions trading scheme (ETS), is a method for nations to reduce global warming. The cost is applied to greenhouse gas emissions in order to encourage polluters to reduce the co ...
. 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.
Evaluations
The Nobel Foundation described Nordhaus's work as follows: "William Nordhaus’s findings deal with interactions between society, the economy and climate change. In the mid-1990s, he created a quantitative model that describes the global interplay between the economy and the climate. Nordhaus’s model is used to examine the consequences of climate policy interventions, for example carbon taxes." Additionally, the Nobel Prize announcement commented that Nordhaus had “significantly broadened the scope of economic analysis by constructing models that explain how the market economy interacts with nature." In an evaluation of the work, Lint Barrage summarizes its impact, stating that the "body of work also represents science at its best: integrative across disciplines, visionary in scope yet incremental in progress, transparent, and producing knowledge for the benefit of humankind."
Critics of Nordhaus's DICE model focus on several aspects. One of the most important, incorporating political and moral philosophy, is the use of discounting, with an early study by William Cline. Another branch, represented by Robert Pindyck, holds that integrated assessment models cannot capture the complexity of the climate-economy nexus. Nicholas Stern argued that the damage function does not capture many of the most important risks to society. A particularly important critique, developed by Martin Weitzman, is that the economy-climate system may have "fat tails" and therefore inadequately deal with low probability, high consequence outcomes.
Steve Keen, the heterodox economist, criticises the economics of climate change:
"economists made their own predictions of damages, using three spurious methods: assuming that about 90% of GDP will be unaffected by climate change, because it happens indoors; using the relationship between temperature and GDP today as a proxy for the impact of global warming over time; and using surveys that diluted extreme warnings from scientists with optimistic expectations from economists."
Publications
References
Further reading
*
External links
*
*
William Nordhaus (Yale Home Page)
The Question of Global Warming
Nordhaus exchange with Freeman Dyson
Freeman John Dyson (15 December 1923 – 28 February 2020) was an English-American theoretical physicist and mathematician known for his works in quantum field theory, astrophysics, random matrices, mathematical formulation of quantum m ...
and others from ''The New York Review of Books
''The New York Review of Books'' (or ''NYREV'' or ''NYRB'') is a semi-monthly magazine with articles on literature, culture, economics, science and current affairs. Published in New York City, it is inspired by the idea that the discussion of i ...
''
*
Energy: Friend or Enemy?
' October 27, 2012 in ''The New York Review of Books''
*
* including the Prize Lecture ''Climate Change: The Ultimate Challenge for Economics''
{{DEFAULTSORT:Nordhaus, William
Living people
1941 births
American Nobel laureates
American people of German-Jewish descent
21st-century American economists
Jewish American economists
Nobel laureates in Economics
Environmental economists
Climate economists
Energy economists
Economists from New Mexico
Yale University alumni
MIT School of Humanities, Arts, and Social Sciences alumni
Yale Sterling Professors
Fellows of the Econometric Society
Presidents of the American Economic Association
Fellows of the American Academy of Arts and Sciences
United States Council of Economic Advisers
Yale University faculty
Distinguished Fellows of the American Economic Association
Members of the Royal Swedish Academy of Engineering Sciences
Members of the United States National Academy of Sciences
People from Albuquerque, New Mexico
Fellows of Clare Hall, Cambridge
Alumni of Clare Hall, Cambridge