Nobel Prize Winner Sees Hope On Climate Change

Paul Bass PhotoOn a day when a new gloomy report emerged about the future of the planet, a ray of hope emerged in New Haven.

The gloomy report was issued Monday by a United Nations scientific panel. It predicted a deadly mass global climate crisis by 2040, much sooner than previously expected.

Meanwhile, Yale Professor William Nordhaus was awarded the Nobel Prize in economics Monday for his decades of research into climate change — and sounded a note of optimism that the work he and others are doing will eventually help address the crisis.

He sounded that note of optimism during a celebratory press conference on the second floor of the School of Management’s main Whitney Avenue building.

Nordhaus acknowledged that under the “anomalous hostility” of the Trump administration the United States has taken steps back from joining with other countries to cut carbon emissions. But he called that only a temporary setback.

“All I can do is hope we can get through this without too much damage. Outside of the United States, there is widespread acceptance of the science and economics behind climate change,” he said. “I think we just need to get through this difficult period.

“I’m supremely confident it is going to happen. There’s a lot of momentum here.”

He expressed confidence specifically about the growing support for market-based solutions like those he has focused on is recent years, such as carbon taxes, which factor in the true environmental cost of using polluting fossil fuels in goods and services; and financial incentives for companies to develop green technology.

Conservative Republican and liberal Democratic economists have reached consensus on market-based solutions, noted Nordhaus, who began studying economic approaches to climate change in the 1970s and has served on Yale’s faculty since 1967. He said he hopes to see that consensus catch on beyond the community of economists.

The Nobel Committee’s decision to award him its economics prize can only help, he said, by “recogniz[ing] what the stakes are here.”

Nordhaus has most recently put his ideas into practice at Yale, where he spearheaded an experiment in assessing charges on different buildings within the university based on their carbon dioxide emissions. (Click on the video for an explanation of how the system works.) The idea is to make it worth each department’s financial while to reduce energy consumption. And the hope is that other universities will adopt the same system — and take one more small step toward saving the planet.

Nordhaus arrived late for the press conference because he was finishing up teaching students.

“He didn’t want to miss class,” observed Yale President Peter Salovey. “If you don’t want to cancel class on the day you win the Nobel Prize, you’re never going to cancel it.”

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posted by: Jill_the_Pill on October 8, 2018  3:39pm

Charging the various Yale buildings for their emissions is clever and all, but it’s nearly an empty gesture when Yale’s endowment is invested in polluting fossil fuel companies who actively fight against effective approaches to the climate problem.

posted by: Kevin McCarthy on October 8, 2018  7:55pm

Jill, I support divestment as a political statement. But its impact on greenhouse gas emissions is likely to be negligible. Yale won’t hold a fire sale of its energy holdings; arguably as a fiduciary it can not. Instead, it will sell them to another investor at current market prices. I see no reason to believe that the buyers will be more enlightened on climate issues than Yale.

As the article notes, Prof. Nordhaus has been addressing climate-related issues for many years. (I cited his work in my dissertation 35 years ago.) I hope he is right that markets can provide the tools needed to rein in GHG emissions. But today’s announcements from the International Panel on Climate Change are very sobering.

posted by: BevHills730 on October 8, 2018  8:47pm

Kevin,

How is Yale responsibly managing its Fossil Fuel Investments?  Coal mines in Australia, fracking in West Virginia, major pipelines that are opposed by the climate movement.  Owning major chunks of companies whose leaders donate to climate deniers.  This is about as reckless as an institution could be in its investment startegy given the consequences for our planet. You can say divestment is meaningless, but the impact even as a symbolic gesture would have much more of an impact than some neoliberal and hypocritical scheme.

posted by: Sophie Hatter on October 8, 2018  10:19pm

I’d recommend checking out the new Global Fossil Fuel Divestment report (https://www.arabellaadvisors.com/wp-content/uploads/2018/09/Global-Divestment-Report-2018.pdf). In the past 6 years, institutions with $6.2 trillion in assets have divested from fossil fuels, and fossil fuel companies have begun to list the fossil fuel divestment movement as a significant financial risk to their businesses. Even though other investors buy the shares that divesting institutions sell, divestment creates a narrative shift, popularizes #KeepItInTheGround, and trains a generation of politically active young people who go on to fight for climate justice throughout their lives.

By investing in companies whose business models are predicated on extracting as much coal, oil, and natural gas from the ground as possible, Yale demonstrates that it expects a profit from this continued extraction. This is not only immoral but fundamentally incompatible with the scientific consensus that in order to stay below 2 degrees, 80% of fossil fuels currently listed in companies’ reserves (and contributing to their stock value) must stay in the ground.

And while the IPCC lists market-based mechanisms like carbon pricing as an important solution, they need to be coupled with massive investments in renewable energy infrastructure particularly for low-income and marginalized communities. The current “consensus” price on carbon that Republicans and Democrats are beginning to agree on is orders of magnitude below what the IPCC suggests is necessary (and the IPCC’s estimates are historically conservative). And by setting a price on carbon and then sitting on our hands while we let the markets take care of it, we allow the most marginalized and least culpable members of our global community to suffer the inevitable impacts of the climate change we’ve already locked in.

posted by: JCFremont on October 9, 2018  6:24am

Maybe the governments can help climate change if they allowed “Markets” and innovation to work on a level playing field. Electric Cars might be just a transitional technology, but governments have heavily subsidized electric vehicles and solor panals much going to one high profile businessman. Many people disagreed with the Paris Accords because it was a political slush fund and no one had confidence that any of the recipients would do anything other than pad off shore accounts.

posted by: Jill_the_Pill on October 9, 2018  7:48am

JCFremont, have you looked into the US’s annual $25 billion fossil fuels subsidies at all?

posted by: HewNaven on October 9, 2018  12:05pm

Problem: Humanity will soon destroy itself operating under the assumption that “the market” is wise and powerful.

Answer: Market-based solutions!

posted by: JCFremont on October 9, 2018  6:11pm

I did, thing is tax deductions and reduced tax rates don’t fit under the definition of a subsidy.

posted by: Kevin McCarthy on October 9, 2018  7:51pm

BevHills730, you did not read my post. In the first sentence, I say I support divestment. I didn’t say that divestment is meaningless - it would be irrational for me to support divestment if I believed this. I also did not say that Yale is responsibly managing its fossil fuel investments. Rather I said that there is little reason to believe that the buyers of these stocks will be any more enlightened than Yale (and they will likely be less susceptible to public pressure).

Sophie Hatter gets to the point I was alluding to in my second paragraph. I fear that there is not the political will to set a carbon price high enough to significantly affect climate change. And climate change raises nasty equity issues (inter-generational as well as as international). I worked with elected officials for 30 years. It is a tough sell politically to argue that Americans should pay higher energy prices now when the bulk of the benefit of this policy will go to future generations. It is an even tougher sell that Americans should financially support climate response initiatives abroad. I actually support both types of measures. But the last time I ran for political office was 45 years ago.

JCFremont, there is no free market in energy and there has not been one at least going back to the days of John D. Rockefeller. In addition to the subsidies that Jill mentions, there is the liability cap for the nuclear power industry..And no energy industry (not even the renewable sector) fully pays for its externalities, such as the health costs associated with coal use or the environmental damage associated with large scale hydro-electric projects.

posted by: BevHills730 on October 10, 2018  11:00am

Kevin,

You articulated the power of divestment.  If the only organizations that are willing to hold onto fossil fuel divestment are organizations that are less susceptible to public then the industry would have much less legitimacy and influence than it does today.  Yale is a conservative and elite institution. Its divestment would be substantially undermine the legitimacy of the fossil fuel industry.  Conversely, organizations that continue to invest in fossil fuels, like Yale, should not enjoy any legitimacy of contributing to the public good. 

Also the bulk of the benefits at this point will go to young voters and our children.  We are no longer in a historical moment when the costs of climate change will only be felt by people who aren’t yet born.