TCS Daily

The Environment:Getting Better, Not Worse

By TCS Daily - October 9, 2001 12:00 AM

AEI-Brookings Joint Center For Regulatory Study Event on Oct. 3, 2001, with Professor Bjorn Lomborg, author of The Skeptical Environmentalist

Moderator: James Glassman of Tech Central Station

Panelists: David Sandelow of the World Wildlife Fund and Alan Hammond of the World Resources Institute

Robert Hahn, co-director of the AEI-Brookings Joint Center for Regulatory Studies: There have been hundreds of books written about the environment over the last 20 or 30 years. Many of those books are of the doom and gloom variety with titles like Silent Spring by Rachel Carson, Toxic Terror, and Dead Heat. There are a few on the other side, the "don`t worry, be happy" category, which say that markets will solve everything. The Skeptical Environmentalist by our featured speaker today, Professor (Bjorn) Lomborg, has a bit of yin and yang in it, and that`s perhaps why I like it. It points out that things are getting better for the most part, but we still have lots of work to do. Not only in addressing environmental problems, but also in addressing problems of poverty. It points out that we can`t solve all environmental problems, nor can we solve all social problems. So therefore we have to introduce a dirty word into the lexicon, prioritize. And indeed, dare I say it, we need to begin to weigh the costs and benefits of different policies so we can better allocate resources to their highest value. Now this is music to the ears of people like my colleague, Randy Lutter and myself and others at the Joint Center, but on the other hand, this music may not be so melodious to members of Greenpeace. Maybe Bjorn can tell us a little bit more about that.

This book develops its conclusions the old-fashioned way, through a judicious application of science, economics and common sense. Professor Lomborg`s book is at the top of my environmental hit parade for three reasons. First, because he puts the former law review editors in this audience to shame. For those of you who don`t have the book there are about 2,900 footnotes in this book that support his well-reasoned argument, and I confess Bjorn that I didn`t read them all, though I did read the text of the book. But I did note two footnotes where you cited my work [laughter] and I might mention in that regard that there are free copies of that book downstairs in my office which I`m trying to get rid of in anticipation of my office move.

The second reason I think this book will be of great interest to you is because it provides lots of pictures. Now for those of you who are thinking of waterfalls or trees or majestic mountains those are the kind of pictures I`m talking about. I`m talking about the over 100 figures which are essential graphs for understanding the state of the environment and the state of the world and that Professor Lomborg very ably explains in his eloquent exposition.

The third reason I think that this book deserves very serious consideration is it provides one of the best overviews I`ve ever read of the politics, economics and science of environmental problems, and I`d like to just give you a disclaimer. I`m not being paid by Cambridge University Press, nor have I met Professor Lomborg prior to today. Also, one advertisement. If you would like to learn more about the Joint Center you can view our website which has all our publications written there in their entirety, and if you so choose you can also fill out a blue card in your pamphlet today which would put you on our e-mail mailing list so you can get news of events like this.

I`m very delighted that my colleague from AEI, who also I believe is the founder of Tech Central Station, Jim Glassman, agreed to moderate this panel today. Jim is also a distinguished author in his own right and, Jim, I`ll turn it over to you now.

James Glassman: Thanks, Bob. I`m just going to sit here. I just want to say a few words. It`s just a great, great pleasure to me. ... I first began to hear of Bjorn Lomborg whom I just met maybe ten or fifteen minutes ago for the first time probably about two months ago from my colleagues at Tech Central Station, which is a website that focuses on technology and public policy, and Charles Francis who`s sitting here managed to get hold of Bjorn, called him up, which is . . . you can do that, you know? You can call Denmark. [laughter]

And we talked to Bob Hahn and to Chris Demuth and here we all are today. It`s quite remarkable. I think all of us who are old enough to remember the limits to growth craze during the early 1970s with Paul Ehrlich and others predicting famine and the depletion of resources, the scourge of worse and worse environmental catastrophe, now have something . . . have a very important anecdote.

I think the most important thing about this book as far as I`m concerned is that it began with a premise that was just the opposite of its conclusion. Bjorn Lomborg, who is a professor of statistics at the University of Arnhaus ... in Denmark was leafing through a copy of Wired magazine in 1997 on a newsstand in Denmark and came across an interview with ... the late (libertarian economist) Julian Simon, and Simon was talking about how the state of the world was not as dire as many had thought, which is essentially that the song that Julian had been singing for decades and not that many people were listening. ... What he suspected was that Simon was spouting, and these are Bjorn`s words from his book, "simple American right-wing propaganda." So Bjorn went to his students and said, "Here`s an interesting project for the next semester. Let`s take a look very carefully at the things that Julian Simon is saying and the things that people like Paul Ehrlich is saying and look at the actual numbers and find out where the truth lies." And the result is this truly remarkable book. Bjorn calls the set of beliefs that Julian Simon attacked the litany. And I just want to quote to you from ... his book. He says that "Even children are told the Litany," which he capitalizes. Here from the Oxford University Press` Young Oxford Books, this is a quote, "The balance of nature is delicate but essential for life. Humans have upset that balance, stripping the land of its green cover, choking the air and poisoning the seas." I think you all know what this Litany is." So this is a remarkable book. The Economist has called it a triumph, one of the most valuable books on public policy to have been written for the intelligent general reader in the past 10 years.

We`re going to hear for about a half an hour from Professor Lomborg. Before he begins I want to introduce the two other distinguished members of our panel. Directly to my left is David Sandelow who is Executive Vice President of the World Wildlife Fund and before joining WWF, which in the rest of the word is called something else, right? World ...

David Sandelow: Worldwide Fund for Nature. Glassman: ...Worldwide Fund for Nature. He served as assistant secretary of state for Oceans, Environment and Science and has held many important jobs in government. And to my far left is Alan Hammond, whom I`ve known for, gosh, probably more than 20 years when he was the charismatic editor of a publication called Science 80. He is now the chief information officer and senior scientist for the World Resources Institute and before that he created the research news section of the journal, Science, and has had a distinguished career in journalism and, to some extent, scholarship. He and I are kind of similar in that sense. I don`t know how distinguished my career has been, but we sort of bridge journalism and science. So, Professor Lomborg is going to talk for a half an hour, and then David and Alan will each have about fifteen minutes and then we will probably have a little bit of discussion among ourselves and then we`ll hear from you.

So, Bjorn Lomborg? Please. ...

Lomborg: Thank you very much. You`ve pretty much already given away the book, right? [laughter] But I think it is important though to say that this is not my primary area. I teach statistics, as you said, to 250 students each year in the University of Aarhus. I have to make them think that statistics is not deadly boring. That`s not an easy task, and the only real trick I have is walking forth and back to keep them falling asleep. [laughter] And I`m going to be doing that again today. But the real point that I always try to make to my students is to say listen, you have a lot of myths about how the world works, but it doesn`t necessarily be true just because you`ve heard it from your uncle or because you`ve seen it on the news. And you have to actually go check the data.

Now obviously, I`m also selling a course here, but I`ve always tried to take a lot of different myths and say these are actually not true. I never did that with the environment because I was a committed Greenpeace person, and I really thought just like I think pretty much everyone else, at least in big cities, that everything`s going the wrong way when we were talking about the environment. And that was why I got so upset about the comments that Julian Simon made. But also, of course, because he said, well, go check the data, and I felt like, "Oh, that`s like me talking to my students." So I felt like I had to check it out and I really thought we were going to debunk Simon.

As it turned out we were mostly debunked. I mean there are some things that Simon really was right-wing American propaganda, but a lot of it was true, and that is the important point to get out. And what I`d like to do, I mean given the fact that this is a long book I realize that a lot of you don`t have time or will not be able to read the book. So I would like to sort of give you a quick tour through the book. Of course in that sense I have thirty minutes. I`m going to basically try to cover the whole world, all the things that have happened and all the things that will happen. [laughter] That`s a tall task, and in that sense of course I can only say, which I`m sure Cambridge University Press will love, you`ve got to buy the book if you want to know more. But I`m going to try and give you a feel for what are the basic points and why I make some of those conclusions.

Basically I want to make two points and these are very inter-related and you really need to the one to get to the other. First of all, Doomsday is not neigh. Actually, things are not going the wrong direction. Things are generally moving in the right direction. Things are getting better and better. And I notice, and I`m going to say this a lot of times, that does not mean that everything is fine. That would be a very unscientific thing to say to you. I`m merely saying things are going better and not worse. And that also means that we don`t have to act in desperation.

Basically, the whole idea here is to say if we can start saying, "OK, we`re moving in the right direction," then we will become much more likely to be able to say, OK, we need to prioritize." We simply need to attack worse things first. And then deal with the other things later on. We should start saying where do we spend our money the best. That`s an obvious consequence in an economic sense, but it only works if we don`t feel that we`re cornered. Basically, if we feel we`re cornered, if we feel everything is going to help, if we feel the environment is somehow doomed, then we`re willing to spend whatever it takes to try to get out of there. That`s really equivalent to somebody coming up and putting a gun to your head and saying give me your wallet. You know, you don`t stand around and think, "Ummm. Would I rather buy a toaster?" [laughter] You just simply hand over the money.

But the idea here is to say so if the data, and that`s what I`m going to spend much of the time trying to show you some of the many graphs in the book, the massive data that I present in the book, if that actually indicates things are going better then we can start saying, "OK, we need to prioritize." And that is, of course, the other point here to say then we can start saying, "We`ve only got one bag of money, but we have lots of good things we`d like to do. What of all those things would be the best to do?" And that`s the other thing that I`ll try to get back to at the end, and then just to give you sort of an outline of both the book and my lecture here.

First, I want to talk about how have things been going for humans. What are they likely to do in the future? What about the things that support our future progress, resources and all kinds? What about the pollution that we`re experiencing? And what about the future problems of the globe and I`ll specifically talk about global warming because that`s probably the biggest issue that we are talking about right now. And then finally also what is the cost of us worrying and especially worrying too much? That`s a lot of ground to cover, so in that sense I hope you`ll also forgive me if everything sort of seems . . . somebody yesterday said some of these facts are uncontextualized. Yes, that`s true. I mean if you want to go through the whole thing in 30y minutes you`d sort of have to assume a lot of things. And I do know the fact that we ought to put a lot more words around this, but I`m trying to give you a broad picture of what is happening here.

So let me just give you the short overview of the second part of the book, basically, so, how have things been going? And that is, things have been getting better and better on pretty much all accounts. We have more leisure time, greater security, fewer accidents, more education, more amenities, high incomes, fewer starving, more food, and a healthier and longer life. And this goes both for the industrialized world and, perhaps much more importantly, for the developing world.

Now notice this, and I`ll just show you one of those graphs to say we have more food. This is not to say that there are no problems. Let me show you this one graph and this is how much food we have per person in the world and in developing countries. I`m going to show you a lot of these graphs, right? I`m sorry. I`m a statistician. I think these kinds of things are sexy. [laughter] It doesn`t necessarily mean that everybody else thinks so, right? But it`s a good way of actually getting a feeling for what does our world look like.

And so in that sense what I`m saying is, and you can also see down here I`ll always put the quotation where do I get these numbers from. It`s not that I`m making them up or something here. They basically show all the important areas from the best data that we have. This is from the U.N. Food and Agricultural Organization, their latest prediction and numbers from ... 1961 until 2030 -- it`s a prediction from 1999 and onwards -- per capita, per day of calories. ... and the important point here of course is to say, the developing world here we actually have a situation where they`ve gone from 1,932 calories per day, that`s almost starvation level, in 1961 up to about 2,650 calories per day in 1998 and they`re expected to rise above 3,000 by 2030. That is the point of saying things are getting better.

And notice what I`m saying is slowly things are getting better. That`s a scientific judgment saying this graph is going up, not down. But I`m not saying it`s good enough. I`m not saying, "Hey, they don`t need more than 2,650 calories. That`s enough for them." That`s not what I`m saying. We can still say they ought to have more food, but it`s important to say it`s a lot better to have 2,650 calories than 1,932 calories. Of course, and this is also one of the places where you can take, "Yeah, well, statistics -- you all know the quote - 'lies, damn lies, statistics,' " right? Of course what we really tried to teach our students and the reason why we say statistics is important because it`s really our only way of looking into the social world and making actual scientific judgments. Yes, it is possible to lie with statistics. That`s only because you don`t know how to read statistics properly. What we really try to teach our students, and, of course, also what I try to present to you today, is that there are right ways of showing what statistics are. And yes, there are also false ways or ways that you sort of slip in something that unsuspecting people may actually pick up on. One of the issues that you always say is, "Well, this is just an average." Right? This could actually hide the fact that we get more and more calories per person, it`s probably unlikely it`s one person eating all of it, right? But it could be the middle class that`s actually eating some of this. So it still could mask the fact that ever more people were going hungry, but that`s not the case either.

Actually the U.N., in its latest reports, estimates that in 1970 35% of the entire developing world was starving. That`s more than one in three persons were starving in 1970. In 1998, the number was down to 18%. It is expected to drop to about 6% in 2030. That again points out the fact it`s a lot better that we just have 6% starving than we have 35% starving. But it does still mean that in 2030 there`ll be about 400 million people without enough food. There`s still a problem, but it`s a smaller problem. And so both (sets of) information are important. Things are getting better, but it doesn`t mean that there are no problems.

Let me just again say when I point all these things and say we have gotten all these things, you might say, "Oh, hey, Bjorn just made up a list of all the things that he could find that went the right way." So my friends say there are two graphs in the book, one going up when that`s good and one going down when that`s good, right? But of course the point here is to say, No, this is what the U.N. tells us is the good life. This is what U.N. says, and I would also imagine most of us would expect, this is what constitutes the good life.

So I`m actually trying typically to take the good definition, the definitions that we all agree on, and then say so, how are things going? But, you could also still say, "Yeah, well, but what about all the other issue areas?" On the environmental areas -- I`ll also get into that -- many of those areas have actually improved when we talk about air and water quality. And when we look at some of the costs in the bad years and our general fears and the ones that we have in the future, we then have to start thinking about -- what`s the idea I said before? -- we have to start thinking about prioritizing. We have to start asking the hard questions of: How important is this? How much can we do? And how much is it going to cost because we really have lots of different things we`d like to do?

There are lots of good things to do in the world. We need to do the ones that do the most good and so we both have to look at, for instance, chemical fears, pesticides, that`s one of the big chapters in the book, and global warming which is the one I`m going to come back to shortly. So let me just give you a feeling for it. If you then accept the idea of saying okay, it has been getting better and better on all major accounts. We have more food, we have more income, we have fewer people starving, and so on.

But then what about the future? Is that actually likely to go on? Well, on a lot of counts this really matters, and then to each and every resource and say, "Well, will we be able to handle that? Will there be enough food? Will there be enough forests? Will there be enough water?" And so on. Again, I try to go through all of these different issues in the book. I`m just going to show you one thing, namely the question of resource in the very narrow sense.

The question of, do we have enough resources, as in fossil fuels, and do we have enough resources in non-fossil fuel resources? I`ll just show you two graphs, the idea here being oil. I mean, we`re an energy-based civilization and we need energy. But on the other hand, the energy that we use right now, fossil fuel, we`ve always been told we`re going to run out of it. This old professor at Princeton, a couple of years ago, said we`ve been running out of oil ever since I was a kid. And, you know, we have to actually then take a look at the data and say, "Well, is that true? Are we actually running out?" Well, actually it`s a fairly simple question. ... In 1920 we know how much oil we used. We also know how much oil we thought was left over in 1920. So if we divide these two numbers we get an estimate of how many years we have left over at the consumption of 1920. The answer was 10 years. So in 10 years` time it had been a natural conclusion we`re going to run out. That was actually also what the Department of the Interior said: We`re going to run out in 10 years` time. Now so if you go to 1930 you`d be tempted to say, "Well, then it should be down to zero." No. In 1930, it was still 10 years, but now at the new higher level in 1930. And, mind you, we`d also used 10 years` worth of oil resources. OK,, well at least then in 1940 we should be down. All right? That was what the Department of the Interior said. But, no, there is still about eight years left over at the even higher rate of consumption in 1940, and despite the fact that we used 20 years` worth of oil. And so the conclusion actually here, we have used more and more oil. We have used that oil, too. And we have a higher consumption each year. Despite that fact, we have had pretty much the highest level of years left over. So the confusing conclusion here is actually that the more we use, the more we actually have left over.

Now notice this does not mean ... that the earth is not round. I mean there`s only so much oil in here. But it means that we have been looking at the wrong parameter in the sense of saying, "Oh, then we`re going to run out when we empty the stock that we already know about." Because, basically, what we do is we find more oil; we get better at exploiting it, and we get better at substituting when that`s necessary. So the idea here is to say, "Yes, we may only have 50 years` left over right now. But, first of all we`re probably likely to find more. We also know that within 25 years we can probably at competitive prices have anywhere from two to five times the amount of oil that we know in conventional terms in shale oil." Actually ... the total, what do you call it, reserves of shale oil is probably at the level of saying that we could cover the present not only oil consumption, but the present energy consumption for the next 5,000 years.

The point here is, of course, to say what will happen is that we are not going to stop using oil because we run out of it, but simply because we get better alternatives. This is also one of the typical quotes by Sheik Yamani , the guy who founded OPEC. He basically says, you know, "The oil age is not going to come to an end because we ran out of oil, just as the Stone Age didn`t come to an end because of lack of stone." [laughter]

The idea here is to say we just simply found better alternatives. And we know, and this is going to be important when we talk about global warming, we know that renewable energy resources have been dropping in price about 50% per decade over the last three decades. This is likely to continue even if it just continues at about 30%. This means that by mid-century, or a little after, they`ll become competitive or even out-compete fossil fuels. So in that sense, it`s unlikely that we`ll continue to sue vast amounts of fossil fuel by the end of the century. This, of course, has great bearing on the global warming issue.

Let me also just give you a feel for what is our actual energy consumption. With the current technology in solar cells actually enables us to cover the entire world consumption of energy by just putting out solar panels and what would be the equivalent of 2.6% of the area of (the) Sahara. I mean nobody`s actually suggesting that, but the debate in Denmark has been pretty heated. So, despite the fact that I say this, as just an example, people say, "That`s totally unrealistic. Just think about all the cords, all the wires." [laughter]

But, you know, the idea here is to say this is actually not a question of we can`t do it. It`s a question; of course, we wouldn`t want to do it because it`d be like five times as expensive right now. But we will be doing that -- either renewable energy resources or fusion age or something we haven`t even thought of right now. So the idea here is to say this curve actually shows that, no, we`re not going to run out of resources. we're actually going to get more and more, which is very counter-intuitive.

Now you may also say well, yeah, yeah, Bjorn you`re showing this graph again because it goes the right way. No. I`m showing this graph because that`s exactly the same way it also looks for the other two important fossil fuels, namely coal and gas, and it`s also the way it looks for all the other important non-fossil fuels. I go through all the major areas of non-fossil fuel resources, the four major ones, apart from cement, which nobody worries about our running out of. We have aluminum, iron, copper and zinc in that order. And all four of them, despite (the fact that) we have increased our consumption in the last 50 years by about two to 10 times, we have seen increasing use of consumption just like here, and not decreasing use of consumption, which is why we`ve seen a general decrease in prices of raw material over the last 150 years.

This is the Economist`s Raw Material Price Index, and what we basically see is that it`s a drop, this is an index up here, where today (it) is equal to one, and basically what we are seeing is a drop about 80% in raw material prices. If the Economist is accurate, that would be to say, if prices drop, it`s an indicator that things are actually getting less scarce, not more scarce. That`s an important point to make basically because what it shows is that not only have things been going better, but they are likely to continue to go better simply because the resources that support our future progress are not diminishing, are not actually falling out. The underpinnings of our future progress is not collapsing, but actually seems to get ever better in the sense (that) ... we leave a world where resources will be cheaper for our children and grandchildren.

Notice I`ve only looked at one issue area. There ... (are) lots of different area(s). We`ll probably take some of them up, then probably some of my opponents will also bring up some of them, and then we`ll have to discuss those when we get there, of course. But again, this is to give you a feel for why this might actually be true -- that things will get better also into the future.

But then, of course, you could say, "Yeah, sure, Bjorn, but Bjorn is really just talking money, right? What about pollution? Pollution could be undercutting our welfare, our future welfare. What does it help if we get a lot of money if we`re coughing all the way over to the bank?" So the idea here, of course, is to say, "Well, let`s try and look at some of the important pollution areas." And I`m going to show you the most important area. The U.S. EPA (Environmental Protection Agency) estimates that about anywhere from 83 to 96% of all social benefits from regulating pollution comes from regulating air pollution and especially particulate pollution. So this is by far the most important pollutant, and I`m just going to show you this one graph. We have all an idea of air pollution as a fairly recent phenomenon, and it`s getting better and better. I`ll show you the graph from London, which is the only place that we have data very far back. This is from 1585 until today. ... Now we don`t actually have measurement and we`d love if somebody had been out measuring in 1585. They didn`t do that. This is based on a model from coal imports, and since that was a very well regulated thing in London there is high confidence in this model, and then it`s been correlated to the models, to the measurements that we have beginning in the early 1920s and until today. And what we basically see is the air pollution has increased since 1585 up to about 1890, and from then on it`s declined dramatically, so that now in London the air is cleaner, when we talk about the most important air pollutant, then it`s ever been since 1585. The air has never been cleaner in London since the medieval times. Now that`s an important point to make, but it does not mean -- and that`s actually one of the arguments I make in the book -- it doesn`t mean that this might not actually be a good investment to cut it even further. But the idea is we should cut it because it`s a good idea, not because we`re worried that we`re going to get overwhelmed somehow by particles, particle pollution or pollution in general.

No, pollution has gone down, but it might actually be a good idea to cut it even further. That makes good sense certainly in the case of Britain and Denmark, and Britain about half of all particulate pollution is passed by just 6% of the cars, namely diesel cars, because they put out much more. It`d be very costly to put a special catalytic converters on diesel cars to cut down particle emissions, but it seems that that would actually be a very, very good deal, all in all. So the idea here is to say, "Yes, we can still do good things for the environment, but we shouldn`t do it because we worry, because we`re saying, 'Oh, everything is going to hell,' but because simply it`s a good idea." So the idea here again is to say this shows us generally that, at least to the developed world, things are not getting worse, but they`re actually getting better.

But we can still make a good argument that at some point, and certainly when we talk about particulate pollution it`d actually be a good idea to do even better. ... Yesterday my opponent also said, "Well, Bjorn just took London because it`s also one of the dirtiest cities in the world." Well, yes, London was a very dirty city. It`s not really clear whether it was the dirtiest. ... We certainly also have data from Pittsburgh and several other places that I also show in the book. But it is also because that`s where we have the data from. Naturally, we would like to have data from other places, but it`s the only place that we have a model that goes all the way back to 1585. I don`t pick these out just to make bad cases. I just simply pick them out because that`s where we have the data.

But everybody agrees, and this is pretty much the picture that we have seen for all developed countries, that we`ve seen dramatic declines over the last hundred years in most of the developed world. Now, that is not happening if you live in Beijing or in Mexico City. Things are actually getting worse and worse. But that`s also in a sense obvious -- this is one of the World Bank analyses -- ... basically, what we see is if we see income per capita this way (Editor's note: income per capita increasing) and, for instance, particles and concentration, well, first things get worse and then they get better (Editor's note: particulate concentration first rises then declines). That`s no big surprise in the sense that this is exactly the pattern we saw for London and that is also likely to be the pattern that we`ll see for all the developing world. Basically, they say first, "Cool, we can get industrialized, we can actually get money enough to buy ourselves food, give our kids a college education, and maybe buy things for ourselves." And only when you get sufficiently rich do you start saying, "Hmmm? Now it`d also be nice to cough a little less." And then you find some environmental improvement. That`s what we did in the developed world, and it`s also likely to happen in the developing world. So, it`s important to say, "Yes, things are getting worse when you talk about air pollution in the developing world, but maybe they`re just making exactly the same tradeoff because they`re poor as we did a hundred years ago or certainly we saw that they did in London a hundred years ago."

Now, so let me get to the idea of saying what I tried to show you here very quickly is basically things have been getting better in the past. They are likely to do so into the future. It`s not likely that pollution is going to undercut future progress in the sense that the most important pollutant, and by far the most important particulate pollution, has been declining dramatically in the developed world, there`s still a good case to be made to make it decline even further. And there`s a good argument to say that that will also happen to the developing world.

So, what should we then do about the things that we worry about in the future? And then I`m just going to talk very shortly about global warming because that is obviously, in a sense, probably the biggest issue of the day. That is the word that most people hear right now. Well I`m not going to get into at all the discussion about the science of global warming. There`s a lot of discussion about the uncertainty there. It seems to me that what we really need to know more about is to what extent is global warming going to harm us? We`re still talking about 25 years of research. We basically have the same doubling of carbon dioxide, the sensitivity, and it`s still the same range, 1.5 degrees Celsius up to 4.5 degrees Celsius. The one thing would not harm us very much, the other thing would harm us dramatically and we`d really like to know which is true. We still don`t know, and it doesn`t seem like we`ve gotten much closer to saying that.

But it seems incontrovertible that carbon dioxide is warming the planet. Now we need to realize that, since it`s likely that we will stop using fossil fuels in a massive scale by the end of the century simply because ... we are going to see that renewable energy resources definitely will become competitive or even out-compete fossil fuels by around mid-century and it is also likely that there will be all other technologies, then it seems likely that we will see a temperature increase given the IPCC (the United Nation's Intergovernmental Panel on Climate Change) report of about two to three degrees warming. Now that is not a trivial amount. That will mean great disruption in many places. However, it`s also important to realize this will mainly impact on the Third World. In the technical summary of the IPCC that I quoted, the scientists did write out; the politicians changed that for obvious reasons. They just simply deleted it or blurred the paragraph. But basically what they (Editor's note: the scientists) said was (that) up to two to three degrees warming, this is not going to harm the developed world. Basically on average, it`s both going to be positive and negative, and it`s basically going to be around zero or maybe even positive to the developed world. What it will do is that it will harm the developing world. And that`s an important point, in the sense of saying when we talk about global warming and being sensitive about global warming if what we`re looking at is two to three degrees temperature increase it`s primarily about helping the Third World, avoiding some of those consequences that will come from two to three degrees warming. Naturally we could do this in either way of saying we`ll help them in other areas or that we will help them in avoiding some of that temperature increase basically by cutting back carbon dioxide emissions.

Let`s just take a look at the primary thing that we`re talking about right now, namely Kyoto, and say okay, we`re trying to do something about global warming by cutting back on carbon dioxide. That seems a sensible idea, right? We`re saying basically we have a huge problem here. I`m going to show you in a little while it has about the total scare, economists just like to make up these numbers, but basically say it has a consequence of about $5 trillion, global warming. That`s a lot of money. I mean we`d love ... that there was no global warming. We can`t really wish it away, right? But we`d love if it wasn`t there. So to that extent there is a big problem here. The question, of course, is the cure then actually going to be more expensive than the original disease? That is the question we need to ask. It does not make sense to say we have to do something about a problem if what we can do is actually very marginal or even counterproductive in the sense of using vast amounts of resources and doing almost no good.

Now let`s just take a look at what can we do when we talk about the Kyoto Treaty (Editor's note: The Kyoto Protocol was negotiated in 1997 but has been enacted in only one developed nation. It calls for reducing worldwide emissions of greenhouse gases by 5% below 1990 levels). This is one of the ... lead models of the 1996 IPCC report, but this is what all models come up with in qualitative terms. Obviously they have different predictions, but it`s the same amount pretty much that they come up with. If we don`t do anything, if we just do business as usual, this model predicts a temperature increase of about 2.1 degrees (C) in 2100. Now that is a substantial amount and we`d definitely like that not to happen.

Now if we do Kyoto, which is basically cutting back carbon emissions about 30%nt for the industrialized countries compared to what it would otherwise have been in 2010. If we do that it`s not like we`re going to stop global warming. We`re just simply going to make it less quick. What we will do is it basically means that we`ll get a temperature increase of 1.8 degrees. Now notice these are the exact models that the IPCC used. So there`s no question about these in the sense of that is our best prediction of what will happen.

What we`re basically saying here is the temperature increase that we would have in 2094, we`ve now postponed until 2100. So to put it a different way, what Kyoto does is it does not stop global warming. It simply postpones the problems for about six years. So, to take the Bangladesh who has to move because his house gets inundated, it`s not like we`re saving him or his house by doing Kyoto. We`re just simply buying him six more years to move in 2100.

That`s of course better than nothing, but we have to ask ourselves is it worth the cost. And the cost on the other hand by all the major models, and this is also what is referred in the IPCC, is anywhere from $150 to $350 billion a year for the globe. Just to give you a context feeling of that, our total global aid to the Third World is estimated at about $50 billion a year. So what we`re talking about is to spend three to seven times the amount of global development aid every year into the 21st Century to help the developed world postpone their problems for six years. Is that a good idea? Well, to give you another feel of that is to say for the cost of Kyoto for just one year we could solve the single biggest problem in the world. We could give clean drinking water and sanitation to every single being on earth. That would save about two million lives from being lost every year. It would save about half a billion people from getting seriously ill every year.

So the idea here is to say would we be able to spend that money better and help the developing world better by spending that money elsewhere, which is really what a cost-benefit analysis does. It goes in and says (to) ask the essential questions, and say just because there is a problem here, if we can only act on the margins -- mainly what we do is Kyoto, but it`ll do very little good very far into the future, and on the other hand it`ll be incredibly costly - now, is that a good idea? And actually that is the answer.

I`m just going to show you one of the cost-benefit analyses - there've been 14 to 21 depending a little bit how you count them, but all of them come to the substantially same conclusion, namely that Kyoto or anything close to that just does not pay. The point here is to say the total cost of global warming if we don`t do anything is likely to be around $5 trillion. Notice there`s way too many numbers here. It`s just simply because that`s our central estimate right here. I mean there`s nobody who knows it`s $4.82 trillion, I mean it`s in that ballpark area, but the idea of course is to say what we`re trying to do is to compare different numbers here. And that comparison is broadly true, although of course it varies from different models. ... This is the Nordhaus model from 2000. If we do something about global warming in the sense of saying ... there are places where we can cut carbon dioxide emissions fairly cheaply we should do that -- that`s about 4 to 11% over the century -- then we will save a little bit of money. Basically we can cut down the cost of global warming slightly in the sense of incurring some costs now and avoiding some costs down the road. That`s $0.3 trillion dollars we can save. The important point, of course, is to say if we do Kyoto or something even worse -- and some say we want to do stabilization of emissions on the entire planet, that is also getting the developing world in on it -- then the cost almost doubles. The idea here is to say we`ll incur a great cost right now, but we will still get most of the problems down the line. We`ll just be postponing them a little bit. And in that sense it`s just saying it doesn`t pay.

And this is not a consequence of the economist tweaking the models. It just simply comes from the very basic fact of saying is it worth an enormous amount of money now to only postpone the problems for about six years, but still having to pay all of it only six years later. In that sense it comes out even no matter how you tweak the model, you really have to change the parameters very, very dramatically in order to make that come out as anything else. But, no, it does not pay off. ... If we want to limit temperature growth at 1.5 degrees for instance, then we can end up having even higher costs. And in that sense it`s also important that ... what people will typically say is "Well, Kyoto is just the first step." That`s probably true in what most people actually think of in that process. But, of course, if the first step is a bad step it does not necessarily follow that a lot of those steps will be a good idea. ... What cost-benefit analyses have shown ... the cost will actually be even higher if we try to do more than Kyoto. So in that sense the idea here is to say it`s just simply a bad way of helping the Third World. We end up spending an enormous amount of money doing almost no good. And my argument is again to say that we have as scientists a responsibility to point out, I think, that we could spend that money much, much better, do much more good, for instance giving clean drinking water ...and sanitation to the entire planet. And that`s (spending) only ... the cost of Kyoto in 2010. In 2011 we can do something almost as good again.

So the idea here is why don`t we do that instead? And that`s one of the central arguments I would really like to press on David (Sandelow) to comment about. ... So I`d really like to hear why isn`t it we do this kind of thing? That`s an important question to ask. And the idea here is also ... basically to say let`s just get a feel for what are the important issue areas here.

Global warming is going to cost about $5 trillion. Just to give you a feel of it. The total worth of the 21st Century by the IPCC`s estimates is about $900 trillion. So global warming is not a trivial issue. That`s a fair proportion of the total worth of the 21st Century. But it`s important to say by the IPCC`s own admission the cost of not, for instance, making sure that world trade organizations work -- that we don`t get free trade; that we end up in a regionalized economy (because) ... we end up worrying a lot about the environment may actually be a cost of anywhere from $107 to $240 trillion. This could actually leave the average person in the developing world with about 75% less income than he would otherwise have had. And we have to ask ourselves isn`t that a much more important issue?

So the idea here is to say yes, $5 trillion dollars is a great deal of money. We`d love that not to be there, but basically what we can do about it is about $0.3 trillion dollars. We should do that. That`s a lot of money. We should certainly do that. But we should also realize this is not at all where the major issue of the 21st Century stands. It is actually by the IPCC`s own scenarios, it`s the cost of saying if we do not ensure a global and economically focused economy we could end up losing $107 to $240 trillion. That`s upwards of 25% of the total worth of the 21st Century. That is the much bigger challenge for the 21st Century. It`s just as important. This is basically an environmental discussion, so obviously that`s what I`m going to focus on, but it`s important to say that there`s just simply much, much more important areas.

Now, so, if this is actually true -- things have been getting better, they`re likely to go better in the future, it`s not like they`re going to be undercut by pollution, and (as) we look ahead to the problems, there it`s not like global warming is going to kick the legs away under us -- it's going to be a problem that we need to address in the sense of how do we solve the world`s problem the best? And we also have to ask ourselves what is the cost of our extra worry. And I just want to show you that last study from the Harvard University, their risk analysis study, where they went in and looked at the official cost estimates of saving human lives, where this was the primary policy goal.

Now notice a lot of environmental legislation does not have as a primary purpose to save human lives. If we`re talking about saving the Bengal tiger, it probably has the opposite effect, right? [laughter] But the idea here is to say a lot of issue areas we do have as the primary stated public policy goal (is) to save human lives. And then we can go in and say, "OK, how well do we do that?" When we talk about environment and when we talk about a lot of other issue areas -- this is as far as I know by far the largest study that we have in the world and probably reputable for most parts of the Western world -- what is the cost efficiency of saving human lives? That is the stated purpose in different working areas.

Now I`m going to summarize eleven people`s work for three years -- it`s several thousands of pages of reports -- I`m just going to show you one picture, right? [laughter] But it`s actually true in the sense that the background distributions are fair in the sense that we`re just presenting the median cost of what does it cost to save one human life in one year in these different areas. And what they come up with is that in the health area it costs about $19,000 to save one human life one year. Whether that is cheap or not, whether we should do it or not, is obviously a policy decision. Do we want to do that or do we want to buy something else for that money? That`s a policy decision. But, what we can say is that`s a typical cost of saving one human life one year in the health area. For the residential areas it`s about $36,000. For transport area it`s $56,000. For work-related areas it`s $350,000. And for the environment it`s $4.2 million to save one human life one year. What we could also call this graph is: Spot the bad decision here. [laughter] ... Notice this does not mean that there are not good things to be done in the environment. It just means that on average or in the typical case is that we actually end up spending an enormous amount more to save human lives here than saving them over there when that is the stated purpose.

Why is it that we choose to save a human life two hundred times more here in the health area, or to put it differently why is it we choose to sacrifice 199 people in the health area for saving one person in the environmental area? And this does actually have consequences. They can calculate for about 300 of these interventions, they could calculate what was the total cost. It was about $21 billion saving about 60,000 human lives. ... Had these been spent optimally you could have saved about 120,000 people.

So the point is to say you could have saved 60,000 people for free, or if you want to put it a little more sharply, the current prioritization actually commits 60,000 statistical murders every year. This is not a frivolous point. It`s to point out that the current prioritization has dramatic consequences, and we have to face up to the fact that just only saying we do good, a lot of green movements will tell you hey, yeah, (but at least we're helping people. That's true. But). I mean can you imagine spending a billion dollars and not make somebody happy? [laughter] I mean the idea here is to say it does not make sense to just say, "Sure, we spent a billion dollars and we made somebody happy." What the argument should be is: "We spent a billion dollars and we made as many people as possible happy." And that is what this indicates we`re not doing right now. And that I would surmise is partly because we have that litany of worry that we actually do believe that the earth is coming to an end. We feel that we have the gun to our heads and that means that we end up spending unwisely.

And so this is my conclusion and then I`ll end. This is why it`s important to know the real state of the world. Basically things are getting better and better and they`re likely to do so in the future. This does not mean that there are no problems, there are no worries, just go ahead, pollute the environment. That`s not, emphatically not, what it means. But it does mean that we should realize that the problems are getting fewer and smaller and that we need to prioritize correctly. And this also, of course, means that I would like to ask my critics to focus not just on specific issues where things are going worse.

Yes, this is a large world. There are lots of problems out there. There are lots of places where things are not going well. There are lots of stupid decisions made around the world every day probably. But the idea here is to say on average in the total for all the relevant regions, all the relevant places, you can say on average things are actually improving. And then we have to ask ourselves so where are the critical issues where we can point to the general negative trends that will undercut this or, on the other hand, say if this is actually true, then. first of all, we have to point out things are in general getting better. And then we also have to start getting much, much better at prioritizing correctly, because that is actually what will make it possible for us not only to hand over a better world, but to hand over the best possible world to our kids and grandkids in the sense that we are giving them even more opportunities, that we are giving them an even better world. This does not mean there are no problems, but it does mean that we can do even better if we have the real state of the planet.


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