The Nobel Prize in Economic Sciences has been jointly awarded to two US academics for their work addressing the “long-run, global issues” of climate change and sustainable economic growth.

William Nordhaus, Sterling professor of economics at Yale University, and Paul Romer, professor of economics at New York University, have both “designed methods for addressing some of our time’s most basic and pressing questions”, the Royal Swedish Academy of Sciences said.

Professor Nordhaus was awarded the prize for his pioneering work on climate change. He created the first quantitative model that describes the interplay between the economy and the climate, after becoming increasingly worried about the effects of greenhouse admissions on the climate.

Nordhaus was awarded the prize on the same day the United Nations warned that the world has 12 years to stem catastrophic climate change.

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Professor Romer developed a new model for how technologies develop in the market economy and demonstrated how economic forces govern the willingness of firms to produce new ideas and innovations.

His work laid the foundation of what is now called endogenous growth theory, which has spawned much research in the regulations and policy that aid long-term prosperity.

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The models that Professor Romer and Professor Nordhaus created have significantly broadened the analysis of economic growth and provided the standard framework for research and policy-making in the areas of tech development and climate change, the Nobel committee said.

Professor Romer said that he hoped the prize would show that “humans are capable of amazing accomplishments when we set about trying to do something”.

“Many people think that protecting the environment will be too costly and hard, so they want to deny climate change exists…but if we set about making the policy changes that are required, we can absolutely make substantial progress in protecting the environment and we can do it without giving up the change to sustain growth,” he said.

anna.mckie@timeshighereducation.com