Nordhaus is director of research at the Breakthrough Institute, which he co-founded with Michael Shellenberger in 2003. Today, Breakthrough Institute consists of a policy staff, an annual conference, a policy journal, and a network of affiliated fellows.
Breakthrough Institute analyses of energy, conservation and innovation policy have been cited by US President Barack Obama., National Public Radio the Wall Street Journal and C-SPAN.
Nordhaus has co-authored analyses of cap and trade climate legislation, of the "planetary boundaries" hypothesis, energy rebound from energy efficiency measures, carbon pricing, renewable energy subsidies, nuclear energy, and shale gas.
The Institute argues that climate policy should be focused on higher levels of public funding on technology innovation to "make clean energy cheap," and has been critical of climate policies like cap and trade and carbon pricing that are focused primarily on raising energy prices.
The Institute has conducted research showing that shale gas and other major technological innovations were created by American government institutions and public financing. The Institute advocates higher levels of public spending on technology innovation, which they argue will lead to higher environmental quality, economic growth, and quality of life.
In 2004, Nordhaus and Shellenberger, both long-time strategists for environmental groups, co-authored a controversial essay, "The Death of Environmentalism: Global Warming Politics in a Post-Environmental World." The paper argues that environmentalism is conceptually and institutionally incapable of dealing with climate change and should "die" so that a new politics can be born. The essay was debated, and continues to be widely discussed and taught
In, 2007, Houghton Mifflin published Nordhaus and Shellenberger's Break Through: From the Death of Environmentalism to the Politics of Possibility (Houghton Mifflin, 2007). Break Through is an argument for what its authors describe as a positive, "post-environmental" politics that abandons the environmentalist focus on nature protection for a new focus on technological innovation to create a new economy. Time Magazine named Nordhaus and Shellenberger two of its 32 Heroes of the Environment (2008) calling Break Through "prescient" for its prediction that climate policy should focus not on making fossil fuels expensive through regulation but rather on making clean energy cheap. Break Through was awarded the Green Book Award, 2009, whose other recipients include E.O. Wilson and James Hansen.
Their writings have focused on the intersection of climate change, energy innovation, and politics. The two predicted the failure of cap and trade for its focus on making fossil fuels expensive rather than on technology innovation to make clean energy cheap. They faulted the Kyoto climate treaty for being focused on what they called "shared sacrifice" rather than shared technological innovation. They have criticized green cultural life as a consequence of status anxieties among Western consumers. And they have argued for a "theology" of ecological modernization that embraces technological innovation and human development.
Nordhaus and Shellenberger have argued for a "climate pragmatism" and an embrace of modernization and human development. They are co-authors of an alternative framework to the United Nations process focused on energy innovation, pollution control and adaptation.
In 2011, Nordhaus and Shellenberger started The Breakthrough Journal, which The New Republic called "among the most complete efforts to provide a fresh answer" to the question of how to modernize liberal thought, and The National Review called "...the most promising effort at self-criticism by our liberal cousins in a long time."
Nordhaus has taken exception to U.S. Presidential candidate Bernie Sanders' climate change mitigation approaches.
In April 2015, Nordhaus joined with a group of scholars in issuing An Ecomodernist Manifesto. The other authors were: John Asafu-Adjaye, Linus Blomqvist, Stewart Brand, Barry Brook, Ruth DeFries, Erle Ellis, Christopher Foreman, David Keith, Martin Lewis, Mark Lynas, Roger A. Pielke, Jr., Rachel Pritzker, Joyashree Roy, Mark Sagoff, Michael Shellenberger, Robert Stone, and Peter Teague
Nordhaus is the son of Robert Nordhaus, former General Counsel of the United States Department of Energy, and the brother of Hannah Nordhaus, environmental journalist and author of The Beekeepers Lament. He is the nephew of William Nordhaus, an environmental economist at Yale University.