Professor William D. Nordhaus, an economist from Yale who has dedicated more than forty years attempting to convince governments to address climate change through the imposition on a tax on carbon emissions was awarded the 2018 Nobel Memorial Prize in Economic Sciences. Professor Nordhaus has been called “the father of climate-change economics” and developed models to suggest how governments can combat global warming. One key step endorsed by Professor Nordhaus is a universal tax on carbon, which would require polluters to pay for the costs that their emissions impose on society.
Professor Nordhaus shares the prize with Paul M. Romer an economist at New York University who has demonstrated that government policy is critical in the development of technological innovation. Both economists researched the unintended side effects from economic activity, which includes climate change, and it impacts growth over the long term. Professor Nordhaus developed an integrated method assessing economic activity and advocated carbon tax as a way to address the environmental consequences caused by the economic activity.
This award comes on the heels of the United Nations’ scientific panel, an intergovernmental panel on climate change (“IPCCl”) confirming that significant changes in public policy are urgently needed to limit the catastrophic consequences of rising temperatures. The IPCC sets out an appalling picture of the imminent consequences of climate change which are more extreme than previously thought. The position of the IPCC is that to avoid damage the world economy must be transformed in a manner and scale that has “no documented historic precedent.”
This reported was initiated through the decision adopting the Paris Agreement, when the Conference of Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC) at its 21st Session in Paris, France (November 30 to December 11, 2015), invited the IPCC to provide a special report in 2018 on the impacts of global warming of 1.5ºC above pre-industrial levels and related global greenhouse gas emission pathways.
In Nairobi, Kenya on April 11 – 13, 2016 at its 43rd Session, the IPCC accepted the invitation from the UNFCCC to provide the special report in 2018 on the impacts of global warming of 1.5ºC above pre-industrial levels and related global greenhouse gas emission pathways. The IPCC was also instructed to prepare a Special Report with the goal of strengthening the global response to the threat of climate change, sustainable development and efforts to eradicate poverty.
In Bangkok, Thailand between October 17 to 20, 2016 the IPCC approved the outline of Global Warming of 1.5 ºC, an IPCC Special report on the impacts of global warming of 1.5 ºC above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty (“Report”).
The IPCC found that limiting global warming to 1.5ºC requires rapid, far-reaching and unprecedented changes in all aspects of society. Limiting global warming to 1.5ºC compared to 2ºC could result in a more sustainable and equitable society.
There are numerous climate change impacts identified in the Report that can be avoided by limiting global warming to 1.5ºC instead of 2ºC or more. The Report finds that by 2100, global sea level could rise would be 10 cm lower with global warming of 1.5ºC as compared to 2ºC. Also, the potential for an Arctic Ocean free of sea ice during the summer months would be limited to one per century with global warming of 1.5ºC compared to at least once per decade with 2ºC. Coral reefs would decline by 70 – 90 percent with global warming of 1.5ºC, whereas virtually all (> 99 percent) would be lost with 2C.
What is clear from the report is that the world needs to immediately reduce its GHG emissions and limit global warming to no more than 1.5ºC. What is interesting is that just a couple of hours prior to awarding the Nobel Prize to the two economists, the UN issued its dire warning about global warming. According to Professor Nordhaus “The policy is very simple. If you just commit to a tax [carbon tax] on usage of fuels that directly or indirectly release greenhouse gases, and then you make that tax increase steadily in the future … people will see that there’s a big profit to be made from figuring out ways to supply energy where they can do it without incurring tax.”