Businesspeople and economists understand priorities. They know that we can’t have as much of everything as we would like at any one time and that we must make choices. Politicians may understand priorities but are likely to ignore them in order to make promises that win votes. The difference between these two approaches is reflected in the contrast between the views of Bjorn Lomborg and Al Gore on the issue of global warming. As Lomborg says, “Campaigners in rich countries are pushing politicians to spend a great fortune on an ineffective solution to climate change instead of tackling the real problems of today — or looking for better responses to warming.”
The “Gore solution” to climate change is to sharply cut CO2 emissions, through direct restrictions, or a carbon tax or a cap-and-trade scheme. Lomborg does not dispute the view that global warming is happening or that it is related to human activity. What he does dispute is, first, the belief that global warming is among the most urgent issues of our time and, second, that cutting CO2 emissions is the most virtuous thing we can do about it. Global warming, Lomborg agrees, will bring problems, but cutting emissions is an extremely expensive and inefficient way to deal with both the warming and its consequences. The experts at Lomborg’s Copenhagen Consensus Center figure that even if we incur $800 billion of expenses to cut emissions over the coming decades, we would reduce temperature increases by just 0.3 degrees by the end of this century. Each dollar of these billions spent would produce only a few cents of benefit. Furthermore, that would mean “there’s much less money available to respond to the big problems facing developing countries today.”
What is the alternative to imposing expensive caps on carbon emissions? Lomborg recommends that we immediately spend more money on researching and developing alternative energy. If every country agreed to spend 0.05 percent of its GDP on low-carbon energy R&D, the total global cost “would be ten times greater than current spending on this research, yet ten times less than the cost of the Kyoto Protocol.” This would mean research into renewable sources of energy; developing second-generation biofuel from biomass; and investing in energy efficiency, fission and fusion, and carbon capture and storage. Investing a dollar in this alternative solution would create benefits worth sixteen dollars. This is at least 18 times and perhaps 400 times better than the Gore approach. Lomborg explains, “this is because the money spent on research and development will make alternatives to fossil fuels cheaper sooner, and make for a genuine transition to a low-carbon future, with all its benefits accruing sooner and at lower costs.”
Global warming will make some problems worse, but there are far more effective and economically efficient ways of tackling them than reducing emissions. For instance, CO2 reductions will reduce malaria risk by a tiny amount. It would be vastly cheaper and have an enormously greater and quicker effect to invest in mosquito nets and medicine. The same is true of tackling problems like hunger. Lomborg points out that one of the best things we can do to help the environment is to help poor countries get richer. Only wealthy countries can afford to protect and enhance their environment. Again, forcing cuts in emissions is not going to help with this.