The Costs of Climate Change

Professor Nordhaus and farmer examining a field during drought

Economic models allow societies to analyze complex problems and make sensible decisions. Yale University Professor William Nordhaus has been named winner of the 2018 Nobel Prize in Economics for his research on models that integrate climate change into long-term economic analysis. Paul Romer of New York University was also named for his work on endogenous growth theory. Kenneth Gillingham of Yale University reflects on Nordhaus’ profound contributions to the field of economics – and to society more broadly – that led to this recognition, explaining that “Nordhaus laid the groundwork for what is now an entire field on the economics of climate change.” The research analyzes how climate change can be mitigated at the lowest-cost possible, what the optimal climate policy is, and how society’s choices about climate mitigation can influence long-run well-being. Gillingham concludes that Nordhaus’ work is global in scope and visionary, dedicated to preparing societies for what may be the most pressing challenge of our time. – YaleGlobal