William Nordhaus Has Died

William Nordhaus, the climate economist who won the 2018 Nobel Prize in Economics for integrating economics and climate change, has died. 

His influential work ranged widely, from the economics of climate change to the measurement of technological change, the interaction of the business cycle and the election cycle, and the measurement of economic welfare — farsighted work done jointly with the late James Tobin, himself a Yale Nobel laureate and one of the most influential economists of his day.

Nordhaus is best known, however, for receiving the 2018 Nobel Prize for “integrating climate change into long-run macroeconomic analysis,” an achievement most prominently reflected in what was known as the DICE (Dynamic Integrated Climate-Economy) model, an influential model that examines the interactions among carbon emissions, climate change, and economic growth.

The DICE model helps policymakers estimate the economic costs of climate change, including such impacts as crop losses and rising sea levels, and weigh them against the costs of reducing emissions. Nordhaus used the model to demonstrate that a carbon tax can reduce emissions efficiently and to estimate the optimal level of such a tax, providing an influential economic framework for carbon pricing.

The signal contribution of economics,” Nordhaus said in his Nobel speech, “is to recognize that climate change is a harmful unintended side effect of economic growth. The best remedy for such externalities is a pollution charge or what is now known as a carbon tax.”

In 2014 I read Nordhaus's book The Climate Casino which explains his model. It was semi-technical and I'm not sure I got anything special out of it, except a reminder that economics has the ugliest equations of any field*. I think I saw someone criticize Nordhaus's model (I think it was Nordhaus) because it counted agriculture as only 4% or so of the value of Gross World Product, whereas if agriculture completely fails GWP would tend towards zero. 

Paul Krugman writes more about Nordhaus, who was his mentor, on his Substack.

I recognize that climate economics is a complex subject given how complex the world is, but it's something that probably doesn't get enough attention. 

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* far too many primes, tildes, carets etc. (Or, as my favorite professor called them, prime, wiggle and hat.) I don't have a specific example to present now, but I know them when I see them.

From Gavin Schmidt:

Bill Nordhaus has died. Notable for being one of two surviving people who successfully predicted the last 50 years of climate change in the 1970s (Manabe being the other). Both won (different) Nobel Prizes. news.yale.edu/2026/10/31/w...

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— Gavin Schmidt (@climateofgavin.bsky.social) October 31, 2026 at 12:50 PM