For those unfamiliar with the Nordhaus approach to climate change:
>Nordhaus has opined that agriculture is “the part of the economy that is sensitive to climate change,” but because it accounts for just 3 per cent of national output, climate disruption of food production cannot produce a “very large effect on the U.S. economy.”
Does that take into account that much of the other 97% of the nation output depends on workers that need the product of that 3% in order to work efficiently?
It doesn't. It treats the economy not as a dependency tree of goods and services but as abstract disjointed numbers that can be considered as independent variables.
So if agricultural output fell by 50% he isn't considering how this would affect the cost of living and it's impact on labor prices and supply, which would cascade towards the whole economy. He's pretending it doesn't matter because the exchange value of that output is proportionately low in GDP calculations.
I always think of this (2012!) New Yorker cartoon when hearing nonsense like that: "Yes, the planet got destroyed, but for a beautiful moment in time we created a lot of value for shareholders."
This 1992 paper has a section that 3 C of warming leads to 1.2 % of GDP loss globally. Quite an assumption to put it lightly. I don't know how much the rest of the paper then makes any difference...
"A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with it." -- Max Planck
One of the absolute best. Many climate change activists were critical of his work, but don't really understand it (you can see examples of that in this thread).
His paper "SCHUMPETERIAN PROFITS IN THE AMERICAN ECONOMY: THEORY AND MEASUREMENT" is profoundly underappreciated and deeply relevant to the tech community.[1]
This man has done significant damage to the climate movement. His economic analysis is awful yet very influential because policy makers read it and thought "you know what, it's ok, not so bad, lets keep going".
It's immeasurable how much damage his "research" has caused.
Nordhaus co-wrote the standard economics textbook taught globally, endogenous technological change is an exemplary growth theory that (with Paul Romer) was deserving of the Nobel, and was an early proponent of carbon taxes and created many of the tools used in environmental economics.
I mean, he's absolutely deserving of critique, even harsh critique, but you're going to have try harder than "his analysis is awful" and he caused "immeasurable damage" when he co-created the movement.
"Nordhaus co-wrote the standard economics textbook taught globally"
Which is tragic because it is a neoclassical fiction book misleading millions of students. Anyone who is really interested in the history of economic thought will avoid that book for anything other than being a reference of the theoretical position of the neoclassical synthesis.
This is entirely wrong. It is crucial to teach students the foundations of the academic discipline they're about to study, which is currently the neoclassical Keynesian synthesis.
Every economic model is fiction to some degree, what matters is the usefulness of the models to make policy decisions or predict outcomes. One can branch off into heterodox schools of thought like Austrian, Marxism, Chicago, or Behavioral... but students need to be grounded in the field's consensus to be able to know how to speak intelligibly across these areas if they're to have any effectiveness.
Carbon taxes are your typical neoliberal economic non solution. Incoherent policy designed to create as much political blowback against the do gooders as possible.
The “damage” is that he showed with reasonable assumptions that climate change might not be as damaging as some claim? And the research was good enough to win the Nobel prize? That’s why it is damaging?
Do the "reasonable assumptions" include stating that indoor economic activity is unaffected by climate change? Or that the US economy won't be affected because agriculture represents only 3% of GDP?
If that is the standard of argument good enough to win the economics "Nobel" prize all we can draw from this is how much of a politically motivated farce that prize is.
No, Nordhaus was never the problem and policymakers have not been anywhere near as aggressive about climate change as he thought they should be. If everyone had listened to him, we'd be in much better shape. The climate movement's antipathy towards him is a narcissism-of-small-differences thing. The actual problem is that voters only want to address climate change if it can be done without inconveniencing them in any way, which it can't.
Nordhaus' riksbank price winning work justifies global temperature rise to +4°C as optimal. At that point the vast majority of humanity is going to die out with just some pockets surviving.
The reason is quite basic. Global temperature includes the oceans which make up 70% of earth's surface and have a higher storage capacity for heat. So a 4°C global temperature rise might be closer to an 8°C increase to your current local average temperatures and that's the normal days. If you have heat waves those might be +15°C or more.
At those temperatures, Americans and Europeans might need air conditioned buildings just to survive. Other places will require people to wear portable air conditioners.
Obviously you'll also need to move all agriculture indoors.
This is a guy who claimed that 3.5 degrees of global warming was "optimal". He was absolutely delusional and built his models on preposterous assumptions. He did a vast amount of damage to the world by providing false justifications for climate denial and inaction on climate change. The fossil fuel companies must have loved him.
"when Nordhaus looked at the effects of 6 C warming, he did not forecast horror. Instead, we should expect “damages” of between 8.5 percent and 12.5 percent of world GDP over the course of the 21st century. Writing in the Economic Journal, Stern set Nordhaus straight in the harshest terms: “We could see deaths on a huge scale, migration of billions of people, and severe conflicts around the world,” he wrote. “It is profoundly implausible that numbers around 10 percent of GDP offer a sensible description of the kind of disruption and catastrophe that 6 C of warming could cause.”"
It says a lot about economics that he received accolades.
For what it's worth, a loss of "between 8.5 percent and 12.5 percent of world GDP" would be catastrophic. Relative to a baseline of 0% GDP growth --- which would itself be terrible --- a worldwide loss of 8.5% to 12.5% of GDP would entail the deaths of millions, and probably hundreds of millions.
The US GDP shrank 29% from 1929 to 1933. International trade fell by 66% between 1929 and 1932. I don't recall hundreds of millions of people dying in the 1930s.
It's not a Nobel price.
It's honestly a disgrace to the Nobel price.
The entire reason Alfred Nobel even came up with the price is that he didn't want to be remembered as the merchant of death once he passed away.
He made his fortune using explosives, in other words, he made money off of killing people.
Now this guy (Nordhaus) is willingly stepping up in justifying mass extinction and then gets a "in memory of Nobel" prize, basically glorifying "the merchant of death" and thereby turning the entire Nobel price idea on its head.
Nordhaus's model is best described as an "Optimal extinction model". The type of model you would advocate because you're not going to survive until the consequences hit, so him dying today isn't some sad event, it's him shirking his responsibility to the future.
Nordhaus was not a climate denier by any stretch of the imagination. The man founded climate economics, and advocated for carbon taxes very early!
He is deserving of critique for being far too conservative in his approach, yes, but it's not like the biggest damagers of the environment are doing less because William Nordhaus told them to do less. Trump and populist right aren't ripping up the EPA, the Inflation Reduction Act, etc. because of Nordhaus. They ripped up the policies because they deny climate change entirely. Would adopting more aggressive measures in the 80s made things better? Possibly, but I think people over estimate the political will vs. the technological shifts needed to eliminate fossil fuels.
Only now is it obvious we are going to rapidly, exponentially, move to solar globally because the cost savings are undeniable, regardless of what deniers may want. And, contrary to your Berman link above, energy transitions are NOT a myth. They were not evenly distributed, but they were quietly, regionally happening (the UK, and California, for example). Now it's reached a tipping point, and going global.
The effects were not the same as climate change denial, and it's absurd to suggest Nordhaus wanted or even that his results would have let humanity die out.
The majority of damage is being done by climate denying citizens and their elected populist governments that are entirely dismantling climate policies and carbon taxation or alternative carbon pricing measures.
His research methods are the foundation of environmental economics, so he should not be ignored (and won't be, DICE remains one major lens used by governments). The disagreement is over the numbers and specific damage assumptions which have been revised by others in new DICE model variants.
This article goes over his methods and why they're ridiculous:
"The fourth fatal error Nordhaus makes is the most farcical. In a 1991 paper that became a touchstone for all his later work, he assumed that, because 87 percent of GDP occurs in what he called “carefully controlled environments” — otherwise known as “indoors” — it will not be affected by climate.
...
Ignorance of systems has its way of plowing forward, juggernaut-like. Nordhaus has opined that agriculture is “the part of the economy that is sensitive to climate change,” but because it accounts for just 3 per cent of national output, climate disruption of food production cannot produce a “very large effect on the U.S. economy.” "
If anything, he is the guy to be blamed that global climate change theory was taken seriously and not the hockey guy that was making up data.
Just give the condolences for the guy and maybe also fuck off from the Maori lands, that you are occupying - you seriously can't be so radical and not be self-aware of that fact...
For those unfamiliar with the Nordhaus approach to climate change:
>Nordhaus has opined that agriculture is “the part of the economy that is sensitive to climate change,” but because it accounts for just 3 per cent of national output, climate disruption of food production cannot produce a “very large effect on the U.S. economy.”
https://theecologist.org/2023/nov/01/when-idiot-savants-do-c...
Does that take into account that much of the other 97% of the nation output depends on workers that need the product of that 3% in order to work efficiently?
It doesn't. It treats the economy not as a dependency tree of goods and services but as abstract disjointed numbers that can be considered as independent variables.
So if agricultural output fell by 50% he isn't considering how this would affect the cost of living and it's impact on labor prices and supply, which would cascade towards the whole economy. He's pretending it doesn't matter because the exchange value of that output is proportionately low in GDP calculations.
I always think of this (2012!) New Yorker cartoon when hearing nonsense like that: "Yes, the planet got destroyed, but for a beautiful moment in time we created a lot of value for shareholders."
https://www.insidehook.com/culture/story-tom-toro-new-yorker...
You're asking to much of economists
We need only ask that these weak sciences also progress one funeral at a time to fix everything by canceling 18% of the economy.
https://web.archive.org/web/20141211111849/http://www.econ.y...
This 1992 paper has a section that 3 C of warming leads to 1.2 % of GDP loss globally. Quite an assumption to put it lightly. I don't know how much the rest of the paper then makes any difference...
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This audience might appreciate his “Two Centuries of Productivity Growth in Computing”
https://www.jstor.org/stable/4501136
"A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with it." -- Max Planck
One of the absolute best. Many climate change activists were critical of his work, but don't really understand it (you can see examples of that in this thread).
His paper "SCHUMPETERIAN PROFITS IN THE AMERICAN ECONOMY: THEORY AND MEASUREMENT" is profoundly underappreciated and deeply relevant to the tech community.[1]
[1]: https://www.nber.org/system/files/working_papers/w10433/w104...
https://en.wikipedia.org/wiki/William_Nordhaus
This man has done significant damage to the climate movement. His economic analysis is awful yet very influential because policy makers read it and thought "you know what, it's ok, not so bad, lets keep going".
It's immeasurable how much damage his "research" has caused.
Nordhaus co-wrote the standard economics textbook taught globally, endogenous technological change is an exemplary growth theory that (with Paul Romer) was deserving of the Nobel, and was an early proponent of carbon taxes and created many of the tools used in environmental economics.
I mean, he's absolutely deserving of critique, even harsh critique, but you're going to have try harder than "his analysis is awful" and he caused "immeasurable damage" when he co-created the movement.
"Nordhaus co-wrote the standard economics textbook taught globally"
Which is tragic because it is a neoclassical fiction book misleading millions of students. Anyone who is really interested in the history of economic thought will avoid that book for anything other than being a reference of the theoretical position of the neoclassical synthesis.
This is entirely wrong. It is crucial to teach students the foundations of the academic discipline they're about to study, which is currently the neoclassical Keynesian synthesis.
Every economic model is fiction to some degree, what matters is the usefulness of the models to make policy decisions or predict outcomes. One can branch off into heterodox schools of thought like Austrian, Marxism, Chicago, or Behavioral... but students need to be grounded in the field's consensus to be able to know how to speak intelligibly across these areas if they're to have any effectiveness.
Carbon taxes are your typical neoliberal economic non solution. Incoherent policy designed to create as much political blowback against the do gooders as possible.
The “damage” is that he showed with reasonable assumptions that climate change might not be as damaging as some claim? And the research was good enough to win the Nobel prize? That’s why it is damaging?
Do the "reasonable assumptions" include stating that indoor economic activity is unaffected by climate change? Or that the US economy won't be affected because agriculture represents only 3% of GDP?
If that is the standard of argument good enough to win the economics "Nobel" prize all we can draw from this is how much of a politically motivated farce that prize is.
https://johnmjennings.com/the-nobel-prize-in-economics-isnt-...
yes because it's absolutely ridiculous, but because he's a well-known economist everyone listened to him and now we're in dire straits.
No, Nordhaus was never the problem and policymakers have not been anywhere near as aggressive about climate change as he thought they should be. If everyone had listened to him, we'd be in much better shape. The climate movement's antipathy towards him is a narcissism-of-small-differences thing. The actual problem is that voters only want to address climate change if it can be done without inconveniencing them in any way, which it can't.
For further argument, see: https://www.slowboring.com/p/economists-arent-the-problem-on...
Nordhaus' riksbank price winning work justifies global temperature rise to +4°C as optimal. At that point the vast majority of humanity is going to die out with just some pockets surviving.
The reason is quite basic. Global temperature includes the oceans which make up 70% of earth's surface and have a higher storage capacity for heat. So a 4°C global temperature rise might be closer to an 8°C increase to your current local average temperatures and that's the normal days. If you have heat waves those might be +15°C or more.
At those temperatures, Americans and Europeans might need air conditioned buildings just to survive. Other places will require people to wear portable air conditioners.
Obviously you'll also need to move all agriculture indoors.
This is a guy who claimed that 3.5 degrees of global warming was "optimal". He was absolutely delusional and built his models on preposterous assumptions. He did a vast amount of damage to the world by providing false justifications for climate denial and inaction on climate change. The fossil fuel companies must have loved him.
"when Nordhaus looked at the effects of 6 C warming, he did not forecast horror. Instead, we should expect “damages” of between 8.5 percent and 12.5 percent of world GDP over the course of the 21st century. Writing in the Economic Journal, Stern set Nordhaus straight in the harshest terms: “We could see deaths on a huge scale, migration of billions of people, and severe conflicts around the world,” he wrote. “It is profoundly implausible that numbers around 10 percent of GDP offer a sensible description of the kind of disruption and catastrophe that 6 C of warming could cause.”"
It says a lot about economics that he received accolades.
https://theconversation.com/nobel-prize-winning-economics-of...
https://www.artberman.com/blog/the-high-priest-of-ecomoderni...
https://www.latimes.com/opinion/op-ed/la-oe-linden-nobel-eco...
https://www.project-syndicate.org/commentary/misguided-nordh...
For what it's worth, a loss of "between 8.5 percent and 12.5 percent of world GDP" would be catastrophic. Relative to a baseline of 0% GDP growth --- which would itself be terrible --- a worldwide loss of 8.5% to 12.5% of GDP would entail the deaths of millions, and probably hundreds of millions.
The US GDP shrank 29% from 1929 to 1933. International trade fell by 66% between 1929 and 1932. I don't recall hundreds of millions of people dying in the 1930s.
US mortality rates declined during the 1930s. https://www.cdc.gov/nchs/data-visualization/mortality-trends...
World infant mortality rates generally declined during the 1930s. https://www.researchgate.net/figure/nfant-Mortality-Rates-18...
He won the Nobel prize for that climate change research…
It's not a Nobel price. It's honestly a disgrace to the Nobel price.
The entire reason Alfred Nobel even came up with the price is that he didn't want to be remembered as the merchant of death once he passed away.
He made his fortune using explosives, in other words, he made money off of killing people.
Now this guy (Nordhaus) is willingly stepping up in justifying mass extinction and then gets a "in memory of Nobel" prize, basically glorifying "the merchant of death" and thereby turning the entire Nobel price idea on its head.
Nordhaus's model is best described as an "Optimal extinction model". The type of model you would advocate because you're not going to survive until the consequences hit, so him dying today isn't some sad event, it's him shirking his responsibility to the future.
Nordhaus was not a climate denier by any stretch of the imagination. The man founded climate economics, and advocated for carbon taxes very early!
He is deserving of critique for being far too conservative in his approach, yes, but it's not like the biggest damagers of the environment are doing less because William Nordhaus told them to do less. Trump and populist right aren't ripping up the EPA, the Inflation Reduction Act, etc. because of Nordhaus. They ripped up the policies because they deny climate change entirely. Would adopting more aggressive measures in the 80s made things better? Possibly, but I think people over estimate the political will vs. the technological shifts needed to eliminate fossil fuels.
Only now is it obvious we are going to rapidly, exponentially, move to solar globally because the cost savings are undeniable, regardless of what deniers may want. And, contrary to your Berman link above, energy transitions are NOT a myth. They were not evenly distributed, but they were quietly, regionally happening (the UK, and California, for example). Now it's reached a tipping point, and going global.
https://www.thecooldown.com/green-tech/global-solar-capacity...
https://www.economist.com/leaders/2024/06/20/the-exponential...
Nordhaus's work is essentially pacifying neoclassical economics and telling it that business as usual is fine.
This might not be climate change denial but the effects are basically the same.
I'm not sure there is any point in hair splitting whether someone wants to or accidentially lets humanity die out.
In either case you should ignore his research.
The effects were not the same as climate change denial, and it's absurd to suggest Nordhaus wanted or even that his results would have let humanity die out.
The majority of damage is being done by climate denying citizens and their elected populist governments that are entirely dismantling climate policies and carbon taxation or alternative carbon pricing measures.
His research methods are the foundation of environmental economics, so he should not be ignored (and won't be, DICE remains one major lens used by governments). The disagreement is over the numbers and specific damage assumptions which have been revised by others in new DICE model variants.
Why did he believe what he claimed? Did he have any arguments to back it up?
This article goes over his methods and why they're ridiculous:
"The fourth fatal error Nordhaus makes is the most farcical. In a 1991 paper that became a touchstone for all his later work, he assumed that, because 87 percent of GDP occurs in what he called “carefully controlled environments” — otherwise known as “indoors” — it will not be affected by climate.
...
Ignorance of systems has its way of plowing forward, juggernaut-like. Nordhaus has opined that agriculture is “the part of the economy that is sensitive to climate change,” but because it accounts for just 3 per cent of national output, climate disruption of food production cannot produce a “very large effect on the U.S. economy.” "
https://theecologist.org/2023/nov/01/when-idiot-savants-do-c...
If anything, he is the guy to be blamed that global climate change theory was taken seriously and not the hockey guy that was making up data.
Just give the condolences for the guy and maybe also fuck off from the Maori lands, that you are occupying - you seriously can't be so radical and not be self-aware of that fact...
good riddance...
Winner of the fake Nobel
[dead]