Climate Economics with Arvid Viaene
A research-focused podcast on the economics of climate change and air pollution. Episodes are released every two weeks on Tuesday at 6 am CET. Episodes will be either expert interviews or solo explorations of key issues. Hosted by Dr. Arvid Viaene, a climate economist with a PhD from the University of Chicago. He has done research on the impacts of climate change on agriculture and mortality. His research on climate-related mortality has been published in The Quarterly Journal of Economics, and he has advised the European Commission on the impacts of climate policy on firm competitiveness.
Climate Economics with Arvid Viaene
#35 From Rejection to Nobel Prize: The Work of William Nordhaus
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How did economists learn to put a price on climate change?
In this solo episode, I tell the story of William Nordhaus and the development of the DICE model, one of the foundational models in climate economics.
We trace the journey from Nordhaus’s early work on energy models, through his first attempts to connect the economy and the climate, to the breakthrough that eventually became DICE: the Dynamic Integrated model of Climate and the Economy.
Along the way, I discuss:
- why Nordhaus became interested in climate change
- how his early energy models evolved into integrated assessment models
- why moving from partial to general equilibrium mattered
- how he simplified the climate system enough to make it usable in an economic model
- how damage functions closed the loop between climate and the economy
- and why this framework made the social cost of carbon possible
The episode also tells some of the less-known parts of the story, including the fact that the work behind one of the most influential models in climate economics was initially rejected by economics journals before being published in Science.
More than 30 years later, DICE remains a benchmark in climate economics and a central part of the intellectual history of putting a price on carbon.
For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com