Two Americans won the Nobel Prize in economics on Monday, one for studying the economics of climate change and the other for showing how to help foster the innovation needed to solve such a problem.
William Nordhaus of Yale University and Paul Romer of New York University will share the 9 million-kronor ($1.01 million) award, the Royal Swedish Academy of Sciences said.
Nordhaus has called for the world to combat climate change by imposing a universal tax on carbon. Carbon dioxide, which is emitted when fossil fuels are burned, is a heat-trapping “greenhouse gas” blamed for global warming, and a tax would make polluters pay for the costs imposed on society.
By using a tax rather than government edicts to slash emissions, the policy encourages companies to find innovative ways to reduce pollution. Romer has studied the way innovation drives prosperity and has looked at ways to encourage it. He told a news conference Monday that his research had given him hope that people can solve even a problem as difficult as a warming planet.
“Many people think that dealing with protecting the environment will be so costly and so hard that they just want to ignore the problem. They want to deny it exists,” Romer said. “I hope the prize today could help everyone see that humans are capable of amazing accomplishments when we set about trying to do something.”