Nobel-winning economists view tech and tax as answers to our global warming woes

Two big events took centre stage in the science community on 9 October — the Nobel for Economics was awarded to the ‘green growth’ duo of economists, and the much-awaited Intergovernmental Panel on Climate Change (IPCC) report finally saw the light of day. The IPCC report stated that we’re running out of time to get ahead of global warming, but both the Nobel winners expressed what their research points to solutions to mitigate the rising temperatures — technology and taxes. [caption id=“attachment_5344911” align=“alignnone” width=“1280”] Representational image. Image courtesy: John Hogg/World Bank[/caption] “The (IPCC report) collects what we’ve been studying and learning over the last 30-40 years,” Nobel-winner Dr William Nordhaus from Yale said on  NobelPrize.org. “It’s an important reminder about the dangers we face, and what needs to be done.” ‘Green growth’ models in macroeconomics The two American economists, Dr Nordhaus and Dr Paul Romer from New York University, shared the $1.01 million Nobel Prize for Economics for developing “green growth” models in the field of macroeconomics. These models show how innovation and climate policies can be integrated into current economic models for growth. Dr Nordhaus, considered to be the ‘father of climate change economics’, thinks that a global carbon tax on emissions is the most effective way to contain climate change. “We’re doing much less than we need to be doing to reach any of the targets — be it the 1-degree, 2-degree or even 3-degree target,” Nordhaus said. “The policies are far, far behind the science… we’re actually going backwards in US with the disastrous policies of the Trump administration.”

The other winning economist, Dr Paul Romer, has an entirely different approach in mind. In what has come to be known as the ‘endogenous growth theory’, Romer’s awarded research finds that innovation is what has driven economic growth and progress over time, and likely also what will get us out of its anthropogenic impacts on the environment. “What happens with technology is under our control. (Tackling global warming) needs collective action… support for research and some form of patent protection… It takes policies like opening up university education to everyone,” Romer said to Nobelprize.org. “If we set about making the policy changes that are required here, we can absolutely make substantial progress towards protecting the environment… without giving up the chance to sustain growth.”

Romer suggests that it isn’t what one country is doing or the other, but better access to research and discoveries for all that will encourage innovation. This, in turn, he suggests, will add to the development of new technology to address rising temperatures, and progress towards controlling climate change. Could these models proposed by economists Nordhaus and Romer be the most pragmatic approach to addressing our global warming woes?