Economy & Politics

“Green” controversy surrounding a Nobel Prize in economics

If William Nordhaus was distinguished for having highlighted the impact of climate change on economic activity, two years later, here is his work called into question. The latter would serve the environmental cause, according to economists and climatologists.

If William Nordhaus was distinguished for having highlighted the impact of climate change on economic activity, two years later, here is his work called into question. The latter would serve the environmental cause, according to economists and climatologists.

It has gone from light to fire from critics. A 2018 Nobel Prize winner in economics, William Nordhaus was recognized for “integrating climate change into long-term macroeconomic analysis.” But two years later, many speeches continue to oppose economic progress and environmental protection.

For the American-Austrian economist Gernot Wagner, “if he had won the Nobel Prize twenty years ago, it would have helped climate policy”. But his distinction in 2018 would be for him “a step back, in many ways”.


The EU aims to become carbon neutral in around 30 years.

The environmental organization fears that the famous European recovery plan will give pride of place to fossil fuels. It calls on the EU to put in place environmental guarantees that meet the objectives of the Paris agreement.


Same story with Joseph Stiglitz. The economist, himself a Nobel Prize winner in economics in 2001, considers the William Nordhaus model – DICE, or Dynamic Integrated model of Climate and the Economy – “so defective that it should not be taken seriously”. Judging even the message transmitted “reckless”, he warns: “it’s dangerous, we have no other planet to go to if we make a mistake”.

Almost half a century ago, the American economist was one of the first to understand the impact of environmental degradation on the economy. But when he received the Nobel Prize two years ago, his models are no longer in tune with the galloping pace of warming or with new approaches in the field of economics, according to experts.

A result “disastrous for humanity”

Indeed, his most recent work concludes that limiting global warming below 3 ° C would cost more in terms of economic growth than it would bring in avoided damage. His reasoning is as follows: if the world economy grows, societies get richer and can acquire technologies to deal with climate change.


Among the measures presented at the end of May to revive the economy is the idea of ​​developing energy autonomy through the use of photovoltaics. An idea that Claude Turmes, Minister of Energy, intends to implement but not only for residents already equipped. Explanations.


William Nordhaus, however, refused to “respond individually” to questions detailing these criticisms. “We have, outside the European Union, taken no steps, however small, to slow climate change over the course of this century,” he said. “We need national mechanisms (such as carbon taxes and technology support) and international cooperation (such as a carbon pact). This is where my efforts are headed today. ”

Arguments for climate skeptics

Beyond the academic quarrel, the work of the Nobel Prize has a strong influence on political decision-makers, in particular his calculation of the “social cost of carbon”, which quantifies the damage of climate change. According to many scientists, this calculation greatly underestimates the costs. Not to mention that the idea of ​​an “acceptable” temperature rise of 3 degrees goes against a painfully established international political consensus.


European Commission President Ursula von der Leyen (top), speaks via videoconference to top leaders during an EU-Eastern Partnership Leaders' summit at the Europa building in Brussels, on June 18, 2020. (Photo by Francisco Seco / POOL / AFP)

The 27 are meeting this Friday in virtual summit to launch the negotiations, as complex as they are uncertain, on a massive post-coronavirus recovery plan, which would mark a historic stage in European construction.


The Paris climate treaty of 2015 indeed plans to keep the temperature rise “well below” by 2 ° C compared to the levels of the pre-industrial era, while the United Nations group of experts on climate (Giec) concluded in a report released the day William Nordhaus received his Nobel Prize that 1.5 ° C would be a much safer safeguard.

For Johan Rockström, his ideas now provide arguments for “climate skeptics”. He claims to have heard the reasoning of the Nobel Prize taken up by “leaders of Shell, BP, ExxonMobil, the automotive industry and energy companies”.


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