The prize was awarded for their long-term thinking on climate issues and technological innovation in economic research. The two Americans “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.
Nordhaus, 77, began working on environmental issues in the early 1970s and has been trying to measure the economic costs of global warming ever since. In the 1990s, he became the first person to create a model that calculates the interplay between the economy and the climate. He warned in a recent paper that it’s “unlikely” that nations can achieve the 2 degree target outlined in the Paris Agreement and that the “carbon price needed to achieve current targets has risen over time as policies have been delayed.”
The 62-year-old Romer, who this year stepped down from his post as chief economist at the World Bank after a rocky term, has argued that policy makers should stop trying to fine-tune the business cycle and instead promote new technology. His work published in 1990 has served as the foundation for what’s called “endogenous growth theory,” a rich area of research into the regulations and policies that encourage new ideas and long-term prosperity.