[8][9] Nordhaus graduated from Phillips Academy in Andover and subsequently received his BA and MA from Yale in 1963 and 1972, respectively, where he was a member of Skull and Bones.

[15] Nordhaus lives in New Haven, Connecticut, with his wife, Barbara, a social worker recently retired from the Yale Child Study Center.

[18] Nordhaus has also written several books on global warming and climate change, one of his primary areas of research.

Those books include, Managing the Global Commons: The Economics of Climate Change (1994), which won the 2006 award for "Publication of Enduring Quality" from the Association of Environmental and Resource Economists.

For example, in a 1996 article, he wrote,[21] If we are to obtain accurate estimates of the growth of real incomes over the last century, we must somehow construct price indexes that account for the vast changes in the quality and range of goods and services that we consume, that somehow compare the services of horse with automobile, of Pony Express with facsimile machine, of carbon paper with photocopier, of dark and lonely nights with nights spent watching television, and of brain surgery with magnetic resonance imaging.Economist Filip Palda summarizes the importance of Nordhaus's insight when he writes,[22] The practical lesson to be drawn from this fascinating study of lighting is that the way we measure the consumer price index is severely flawed.

In Reflections on the Economics of Climate Change (1993), he writes,[23] Mankind is playing dice with the natural environment through a multitude of interventions–injecting into the atmosphere trace gases like the greenhouse gases or ozone-depleting chemicals, engineering massive land-use changes such as deforestation, depleting multitudes of species in their natural habitats even while creating transgenic ones in the laboratory, and accumulating sufficient nuclear weapons to destroy human civilizations.According to the climate change models Nordhaus has developed, sectors of the economy that depend heavily on unmanaged ecosystems–that is, are heavily dependent upon naturally occurring rainfall, runoff, or temperatures–will be most sensitive to climate change, generally.

[24] In 2007, Nordhaus, who has done several studies on the economics of global warming, criticized the Stern Review for its use of a low discount rate, writing,[25] The Review's unambiguous conclusions about the need for extreme immediate action will not survive the substitution of discounting assumptions that are consistent with today's market place.

The Review informs but does not answer these fundamental questions.In 2013, Nordhaus chaired a committee of the National Research Council that produced a report discounting the impact of fossil fuel subsidies on greenhouse gas emissions.

[30][31][32] In a January 2020 interview with Neue Zürcher Zeitung, Nordhaus claimed that achieving the 2 °C goal of the Paris agreement was "impossible", stating that, "even if we make the fastest possible turn towards zero emissions, CO2 will continue to accumulate in the atmosphere, because we cannot simply shut down our economy".

In 2004, Nordhaus was designated a Distinguished Fellow of the American Economic Association (AEA), along with George P. Shultz and William A.

[35] The accompanying AEA statement referred to his "knack for asking large questions about the measurement of economic growth and well-being, and addressing them with simple but creative insights," among them, his pioneering work on the political business cycle,[36] ways of using national income accounts data to devise economic measures reflecting better health, increases in leisure and life expectancy, and "constructing integrated economic and scientific models to determine the efficient path for coping with climate change".

Additionally, the Nobel Prize announcement commented that Nordhaus had “significantly broadened the scope of economic analysis by constructing models that explain how the market economy interacts with nature.

[44] Another branch, represented by Robert Pindyck, holds that integrated assessment models cannot capture the complexity of the climate-economy nexus.

[46] A particularly important critique, developed by Martin Weitzman, is that the economy-climate system may have "fat tails" and therefore inadequately deal with low probability, high consequence outcomes.

Correcting for these errors makes it feasible that the economic damages from climate change are at least an order of magnitude worse than forecast by economists, and may be so great as to threaten the survival of human civilization.