William Dawbney "Bill" Nordhaus (May 31, 1941, Albuquerque, New Mexico, USA) is the Sterling Professor of Economics at Yale University. Nordhaus lives in New Haven, Connecticut, with his wife Barbara.
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Nordhaus received his B.A. and M.A from Yale in 1963 and 1973 respectively where he was a member of Skull and Bones. He also holds a Certificat from the Institut d'Etudes Politiques (1962) and a Ph.D. from MIT (1967). He has been a member of the faculty at Yale since 1967 and has also served as its Provost from 1986–1988 and its Vice President for Finance and Administration from 1992-1993. His tenure as provost was among the shortest in the university's history. Among many honors, he is a member of the National Academy of Sciences and has been on the Brookings Panel on Economic Activity since 1972. During the Carter administration, from 1977–1979, Nordhaus was a member of the Council of Economic Advisers. He is a foreign member of the Royal Swedish Academy of Engineering Sciences since 1999.
Nordhaus is the author of many books. He is the co-author of the textbook Economics, the original editions of which were written by Nobel Laureate Paul Samuelson. The book is currently in its 19th edition and has been translated into at least 17 other languages. He has also written several books on global warming and climate change, one of his primary areas of research, including Managing the Global Commons: The Economics of Climate Change and Warming the World: Economic Models of Global Warming (with Joseph Boyer). In 1972 Nordhaus, along with fellow Yale economics professor James Tobin, published Is Growth Obsolete?,[1] an article that introduced the Measure of Economic Welfare as the first model for economic sustainability assessment.
His A Question of Balance: Weighing the Options on Global Warming Policies ISBN 978-0300137484 was published by Yale University Press June 24, 2008.
Nordhaus is one of the main economists working on climate change models. As he states "Mankind is playing dice with the natural environment through a multitude of interventions-injecting into the atmosphere trace gases like the greenhouse gases or ozone-depleting chemicals, engineering massive land-use changes such as deforestation, depleting multitudes of species in their natural habitats even while creating transgenic ones in the laboratory, and accumulating sufficient nuclear weapons to destroy human civilizations."[2] He argues that technology has increasingly insulated humans and economic activity from the vagaries of climate.[3] Under the climate change models he has developed in general those sectors of the economy that depend heavily on unmanaged ecosystems–that is, are heavily dependent upon naturally occurring rainfall, runoff, or temperatures–will be most sensitive to climate change. Agriculture, forestry, outdoor recreation, and coastal activities fall in this category."[4] Nordhaus takes seriously the uncertainties and potentially catastrophic impacts of climate change.[5]
Nordhaus, who has done several studies on the economics of global warming, criticised the Stern Review for its use of a low discount rate:[6]
The Review’s unambiguous conclusions about the need for extreme immediate action will not survive the substitution of discounting assumptions that are consistent with today’s market place. So the central questions about global-warming policy — how much, how fast, and how costly — remain open. The Review informs but does not answer these fundamental questions.
The difference between Stern’s estimates and those of Nordhaus can largely (though not entirely) be explained by the difference in the PTP-rate.[7] Previous studies by Nordhaus and others have adopted PTP-rates of up to 3 per cent, implying that (other things being equal) an environmental cost or benefit occurring 25 years in the future is worth about half as much as the same benefit today.[8] Richard Tol argues that in estimating discounting rates and the consequent social cost of carbon, the assumptions that must be made about the remote future are so uncertain that they are essentially arbitrary. Consequently the assumptions made dominate the results and with a low discount rate the social cost of carbon is also arbitrary.[9]