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US 'green growth' duo win Nobel Economics Prize

AFP  |  Stockholm 

US economists and on Monday shared the 2018 Nobel Prize for constructing "green growth" models that show how innovation and climate policies can be integrated with

Working independently, they have addressed "some of our time's most basic and pressing questions about how we create long-term sustained and sustainable growth," the of Sciences said in a statement.

Nordhaus is a at Romer is a former chief now at

The academy said their models, both developed in the 1990s, have "significantly broadened the scope of economic analysis".

The prize announcement came as the UN warned in a landmark report that an "unprecedented" transformation of society and the world was needed to avoid global climate chaos.

It said time was running out to avert disaster, noting that our plant's surface has already warmed one degree Celsius (1.8 degrees Fahrenheit).

Romer told the Swedish academy in a live phone interview at the prize announcement that he was confident the world could reduce and still improve standards of living in the future.

"We can absolutely make substantial progress to protecting the environment, and without giving up the chance for sustained growth," he said.

"One of the problems with the current situation is that many people think that dealing with protecting the will be so costly and so hard that they will ignore the problem and deny it exists," he said.

"I hope the prize will help people see humans are capable of amazing accomplishments when we try to do something."

The jury said that while Nordhaus and Romer "do not deliver conclusive answers ... their findings have brought us considerably closer to answering the question of how we can achieve sustained and sustainable global "


Nordhaus, 77, was specifically honoured for "integrating climate change into long-run macroeconomic analysis." His "integrated assessment model" was created in the 1990s and combines theories and empirical results from physics, chemistry and

It is now widely "used to simulate how the and climate co-evolve." It is used to examine the consequences of climate policy interventions, for example carbon taxes.

Nordhaus's research shows that the most efficient remedy for problems caused by is a global scheme of carbon taxes uniformly imposed on all countries.

Countries refusing to take part in the scheme could be subjected to customs tariffs.

The 62-year-old Romer meanwhile won the prize for "integrating technological innovations into long-run macroeconomic analysis."

Complementing Nordhaus' research, Romer laid the foundation for "endogenous growth theory", which explains how ideas are different to other goods and require specific conditions to thrive.

His research demonstrated how economic forces govern the willingness of companies to produce new ideas and innovations.

"They (the laureates)show and they have taught us how the economic situation is dependent on technological development, environmental changes, so they integrate with major issues facing mankind," Goran K. Hansson, of the for sciences, told AFP.

Romer resigned from the in January 2018 after raising questions about how the institution was ranking countries.

Both Nordhaus and Romer have been tipped as frontrunners for the Nobel Prize in recent years.

The pair will share the nine million Swedish kronor (about $1.01 million or 860,000-euro) prize.

Last year, the honour went to US Richard Thaler, a of the so-called "nudge" theory.

That theory demonstrates how people can be persuaded to make decisions that leave them healthier and happier.

Unlike the other Nobel prizes which were created in Swedish inventor and philanthropist Alfred Nobel's will and first awarded in 1901, the economics prize was started by the Swedish central in 1968 to mark its tricentenary.

It was first awarded in 1969.

The prize, which also consists of a diploma and a gold medal, will be presented at a formal ceremony in on December 10.

The economics prize wraps up the 2018 Nobel awards season, notable this year for the lack of a literature prize.

That award was postponed by a year for the first time in 70 years over a rape scandal that came to light as part of the #MeToo movement.

The awards for medicine, physics and chemistry were announced last week as was the most highly-anticipated Nobel, the peace prize.

It went to Yazidi women's and Congolese doctor for their work in fighting sexual violence in conflicts around the world.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, October 08 2018. 18:55 IST
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