Nobel Prize for Economic Sciences awarded to William Nordhaus, Paul Romer

Romer received the award for what the the Royal Swedish Academy of Sciences cited as his work "integrating technological innovations into long-run macroeconomic analysis.Ó Both Romer and NordhausÕs work has highlighted the global debate over the impact of climate change".

The awarding of the prize proved timely, given it coincided with the release of findings from a United Nations panel warning of ominous consequences of climate change and calling on world leaders to respond with greater urgency.

Romer's research demonstrates how economic forces govern the willingness of companies to produce new ideas, innovations and long-term prosperity.

Romer, an economics professor at the New York University Stern School of Business, said during a news conference he was not expecting the prize - so much so that he did not answer the first two calls from the Nobel committee because he thought they were spam. A number of people are trying to find innovative options that can help reduce emissions and make environmental protection easier for everyone.

Nordhaus, often considered the father of climate-change economics, won "for integrating climate change into long-run macroeconomic analysis".

The Economics award was established in 1968 after the Swedish central bank - Sveriges Riksbank - made a donation to the Nobel Foundation. "Nordhaus has been concerned all along with repairing the damage" to the environment, while "Romer has been writing about the means at your disposal" to take on the technological challenge, he added.

"Paul's first job was at Rochester, where he did pathbreaking work to figure out how firms' decisions to invest in research and development lead to economic growth". The time for baby-step carbon taxes should probably be over.

Romer is Rochester's third economics Nobelist. Its supporters encourage governments and the private sector to foster innovation and incentives for increased creativity. Government policies, he found, are vital.

One of Romer's insights was that ideas differ from other goods or services. Once you eat a Swedish meatball, for instance, it's gone, noted Per Krusell, a Nobel committee member who is an economist at Sweden's Institute for International Studies.

Last year, the honour went to United States economist Richard Thaler, a co-founder of the so-called "nudge" theory, which demonstrates how people can be persuaded to make decisions that leave them healthier and happier.

The peace prize, which was announced in Oslo on October 5, was awarded to Denis Mukwege, a gynecologist from the Democratic Republic of Congo, and Nadia Murad, an activist and victim of war crimes.

Vanessa Coleman