What first made you skeptical about some of the claims being made about the environment?
Like most people I knew, I used to believe that the world was going to hell in a hand-basket. I was a Greenpeace supporter.
In a study group, some students and I set out to disprove the right-wing American claims that things were getting better. Instead, we discovered that the messages of doom were often unwarranted. Take air pollution, arguably the most important environmental indicator. It has declined almost continuously in London since 1890; the air today is the cleanest it has been since 1585.
You acknowledge that global warming is man-made, that it is happening, and that it is a concern. Why, if it is a concern, do you think we are overreacting?
Global warming is being portrayed as the end of the world. Al Gore says it is nothing short of a "planetary emergency". When we hear about climate change in the media, it’s nearly always alarming.
We need to hear about all the ramifications of global warming. For example: global warming will mean more heat-related deaths: about 40,000 more in the United States in 2050. That is important to know. But there will also be 200,000 fewer cold deaths. When we only hear about the 40,000 more heat-related deaths, we’re not likely to make the best policy decisions.
What would you say are some of the more immediate global problems?
In an ideal world, we would deal with all the world's woes right now. We should win the war against hunger, end conflicts, stop communicable diseases, provide clean drinking water to those lacking it, step up the provision of education and halt climate change. But in the real world, we have limited resources. We cannot achieve everything at once and must think about what to do first. That is why I started a project called the Copenhagen Consensus. We gathered some of the world's top economists (including four Nobel Laureates) to prioritize the world's biggest challenges and tell us where we can do the most with our money.
The Copenhagen Consensus experts concluded that the world’s top priority should be combating HIV/AIDS. For $27 billion, we can prevent more than 28 million new cases of HIV/AIDS by 2010. It is the single best investment the world can make: social benefits outweigh the costs by 40 to 1. In other words, we would achieve forty dollars worth of social good for every dollar spent. For every dollar spent on Kyoto, we’d do 30 cents worth of good. Other top priorities identified by the Copenhagen Consensus experts include programs to battle malnutrition and malaria, and the elimination of trade barriers.
What concerns you about the popular response and rising calls to action against global warming?
Celebrity activism has focused the world’s attention on climate change. A spokesman for the Global Fund to Fight Aids, Tuberculosis and Malaria recently acknowledged that he expects a lot of funding to go towards environmental issues instead of health and other developmental concerns.
Blindly spending a fortune to reduce carbon emissions is possibly one of the least helpful things we could do for the world. The Copenhagen Consensus experts put combating climate change at the bottom of their list. They say current methods identified to combat climate change — like the Kyoto Protocol — would cost more than the good they do.
That doesn’t mean we should ignore climate change. But, given our scarce resources, we must ask ourselves whether we want to do a lot of good now or a little good much later.
Why are policies such as the Kyoto Protocol so troubling to you and how can they actually harm developing countries?
Kyoto is both impossibly ambitious and environmentally inconsequential. It asks us to make huge sacrifices–which is why the United States and Australia have backed out, and why Canada, Spain, Greece and Japan will not live up to it–and yet it will make almost no difference to temperatures, even a hundred years from now. Kyoto would cost $180 billion a year for the rest of the century but would only postpone global warming by five years in 2100. Following such a policy means we focus our attention and money on climate when we could focus on doing much more good through HIV, malaria, malnutrition and free trade.
Look at what Kyoto will achieve when it comes to malaria. Global warming will slightly increase malaria by the end of the century (higher temperatures mean there are more places for mosquitoes to live). Yet malaria is overwhelmingly a poverty-related disease. If you're rich, you don't suffer or die from malaria. In countries where the average income is above $3,100 per year, malaria is essentially eradicated. Economic models suggest that the net effect of Kyoto is that we will see more malaria, simply because the economic effects easily swamp the climate effects.
What are the negative effects of cutting carbon emissions? Can carbon taxes help at all?
Cutting carbon means slowing global warming. But it also means more expensive energy. There are real and immediate consequences when low-income households cannot keep warm in winter or cool in summer because of energy price hikes. Yes, we should focus on cutting carbon emissions, but we should be aware of both the costs and the benefits.
Carbon taxes can make a difference, but only in the right proportion. The best estimates from all economic models show that the damage from one ton of CO2 equals about $2. Thus, embracing Al Gore’s suggestion of taxing carbon at $140/ton is bad policy. That is paying $140 to do $2 of good, which is simply a bad deal. We should tax CO2 at $2/ton and cut as much CO2 as is economically sound.
What would be a more realistic and cost-effective solution of the problems of climate change?
I don’t believe we should do nothing about climate change. I believe we should get smarter. We need to abandon expensive and inefficient strategies like Kyoto and think about how to cost-effectively tackle climate change in the long term. Kyoto costs a lot now and does very little for the future. And as long as cutting carbon has high costs, China and India will never participate.
We should focus on bringing down the future cost of cutting CO2 and concentrate on developing low-carbon energy sources. I advocate spending 0.05% of GDP researching and developing non-carbon emitting energy technologies. This approach would cost the world about $25 billion per year. This would increase spending on research and development ten-fold, yet it would be seven times cheaper than Kyoto and many more times cheaper than a ‘Kyoto II’.
This approach would increase the chances of political agreement. All nations could easily get involved, and richer countries would automatically pay the larger share. Each country could develop its own vision of future energy needs, whether that means concentrating on renewable resources, nuclear energy, fusion, carbon storage, conservation or searching for more exotic opportunities. And it would likely solve climate change by making it so cheap to cut emissions that we would stabilize the climate around 2050.
You are often cast as a denier of climate change. How would you respond to those who don’ t think that your response to global warming is rational?
We are talking about the costliest global policies in history. People can disagree with me (and they do!) but I think we need a sensible conversation about whether this is the smartest way to improve the world. It is clear that human-caused CO2 leads to global warming. But it’s also clear that global warming is not the world’s only problem. And it’s obvious that cutting CO2 is not the only solution to mankind’s issues. Anyone who does not support the most radical solutions to global warming is deemed an outcast, called irresponsible, and accused of being an evil puppet of the oil lobby. This is not the best way to frame a debate on an issue this crucial. I believe most participants in the debate have good and honorable intentions. We all want to work toward a better world. But we need to cool the rhetoric and have a measured discussion. Being smart about our future is the reason we have done so well in the past. We should not abandon our smarts now.
What is one cost-effective thing that every person can do to help the world?
There is a real ‘middle-class guilt’ developing thanks to celebrity activism over climate change. Many people in wealthy nations are buying carbon offsets so they can sleep at night knowing they are ‘carbon neutral’. Let’s say a person emits 10 tons of CO2. They pay someone else to emit 10 fewer tons. Often the offsets come from the developing world where, for example, people are given solar cookers instead of burning kerosene. Buying these offsets at the lowest cost, those in the West might spend $100 helping the world. Yet, evidence suggests that the real benefit from this money is about $20 of good. That is a poor deal.
Copenhagen Consensus shows us that if we spent the money on organizations focused on HIV, malnutrition or malaria, we could do $2,400 worth of good in the world. As individuals, we should support organizations embracing smart strategies like preventing HIV or reducing malaria and malnutrition long before those that cut CO2. I want it to be cool to do $2,400 worth of good before you do $20 worth of good. I want it to be cool to commit to the smartest solutions first.