William Nordhaus

The DICE (Dynamic Integrated Climate-Economy) model, developed by William Nordhaus, integrates economic growth, carbon emissions, the carbon cycle, climate dynamics, and climate damages into a single framework. It allows economists and policymakers to analyze the costs and benefits of different climate policies and calculate optimal emissions reduction pathways.

Nordhaus shared the 2018 Nobel Memorial Prize in Economic Sciences with Paul Romer for integrating climate change into long-run macroeconomic analysis. The Nobel committee specifically cited his work developing quantitative models that capture the interaction between economic activity, greenhouse gas emissions, and climate impacts.

Nordhaus's DICE model estimates the social cost of carbon—the economic damage caused by each additional ton of CO2 emissions—at roughly $30-40 per ton in recent versions, though estimates vary based on assumptions about damages and discount rates. This figure is used by policymakers to evaluate the benefits of emissions regulations.

Critics argue that the DICE model may underestimate climate damages, particularly catastrophic risks and tipping points that could cause irreversible environmental changes. Some economists and scientists contend that the model's assumptions about discount rates and damage functions lead to recommendations for relatively gradual emissions reductions that may be insufficient to prevent dangerous warming.