Just a day after a United Nations panel called for urgent action on climate change, the Nobel Memorial Prize in Economic Sciences was awarded Monday to one American researcher for his work on the economics of a warming planet and to another whose study of innovation raises hopes that people can do something about it.The Royal Swedish Academy of Sciences awarded the $1-million prize Monday to William Nordhaus of Yale University and Paul Romer of New York University. Nordhaus, 77, who has been called “the father of climate change economics,” developed models that suggest how governments can fight global warming. He has endorsed a universal tax on carbon, which would require polluters to pay for the costs that their emissions impose on society.
Or as economists term it, externalizing the costs. In the Industrial Age that brought the centralization of workplaces, the environmental as well as personal costs of daily commuting were externalized onto society and workers, respectively.
Now that Information and Communications Technology (ICT) allows knowledge workers at least to work where they live, acceptance of those costs is likely to meet with increased resistance. Especially if high carbon taxes are adopted and commuters face rising fuel and other transportation costs. And for good reason. The externalization and bearing of those costs no longer makes sense.