Economist Liang Xiaomin shares his view on William Nordhaus' book The Climate Casino at the Yale Center Beijing. Photo: Courtesy of Yale Center Beijing

A US Nobel laureate is calling for China-US cooperation on mitigating global warming, despite the US's withdrawal from the Paris Agreement. 

"Climate change is inherently a global issue. China and the US are the two most important [countries] in terms of both causing it and being impacted by it," William Nordhaus, Sterling Professor of Economics at Yale University and co-winner of the 2018 Nobel Prize in Economic Sciences, said in a video sent to the a book launch celebrating the Chinese translation of his latest work The Climate Casino held at the Yale Center Beijing in early November. 

"In terms of solving the problem or at least taking steps to slow climate change, perhaps stop climate change, the two key countries here are the US and China, they are the countries that would need to form the core of a coalition of countries who would act together and take steps to slow climate change," said Nordhaus.

From shifting weather patterns that threaten food production to rising sea levels that increase the risk of catastrophic flooding, the impacts of climate change are global in scope and unprecedented in scale, according to a report issued by the UN Intergovernmental Panel on Climate Change (IPCC) in 2013.

Nordhaus is one the world's leading advisors on the economics of global warming. His insights have become one of the most widely used theoretical bases for international climate economic policies and climate change negotiations, including the Kyoto and Paris climate accords. 

He suggests that climate change is an urgent economic issue with impacts that bear spiraling costs. We entered the "climate casino" and are rolling the global warming dice, Nordhaus warns. But he attempts to find the keys to unlock the path to get out of the casino in his book.

Pricing of carbon

Pricing of carbon and other greenhouse-gas emissions is one of the key themes in his book. Nordhaus advises that nations must establish policies that raise the price of CO2 and other greenhouse gas emissions. Carbon pricing is essential to curb emissions, promoting low carbon technologies, and thereby inoculating the planet against the threat of unchecked warming. 

"We need to put a price so that when people burn fossil fuels, and put carbon dioxide and other greenhouse gases into the atmosphere, the cost of that is embodied in the goods and services. If the price was higher, people would pay attention, firms would pay attention to what processes they use," said Nordhaus.

But adopting a carbon tax creates another set of problems. Should carbon taxes be the same in different countries? Would the same level of carbon taxes be applicable for developing countries? If gaps are allowed, how should they be measured? These are all difficulties involving political negotiations, Liang Xiaomin, the translator of the book and a Chinese economist, told the Global Times.

Nordhaus warns that slowing climate change requires coordinated global action. "If China and America can work together, I think they would form the core of a group which would take effective steps and form an effective policy coalition. That's why I'm so delighted it has been translated into Chinese for a billion and half people, who read Chinese, speak Chinese, to talk about it, to read it, to have a chance to understand it," Nordhaus said in the video.

Interests and conflicts

Liang suggests that competing interests among various interest groups can prevent transnational cooperation in climate governance. 

"It is very hard to achieve a uniform set of schemes and standards at the international level. Many senior Republicans in the US, for example, are adamantly opposed to participating in global climate governance. For many of the Republican tycoons, they will suffer if carbon pricing is introduced. That's why many environmental deals fail to be passed in the US," Liang told the Global Times.

"Global warming is not only a climate and economic issue, but also an international political issue," said Liang.

More than 190 countries have adopted the Paris Agreement, but only the US, a major emitter of carbon dioxide and also one of the major countries that cause climate change, has rejected it.

International observers expect that some emerging powers, such as China and India, can show greater leadership in averting global climate change.

Liang believes China should do more research on climate economics. He is grateful to the Orient Publishing Center for publishing the Chinese version of Nordhaus' book, which provides lessons that can be used to promote research in China and find climate economics models applicable to China's development.
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