0:33 Intro. [Recording date: April 16, 2019.] Russ Roberts: My guest is Bjorn Lomborg.... Our topic for today are the costs and benefits of attacking climate change.... Let's start with your assessment of the risks from global warming. How serious do you think it is? Bjorn Lomborg: So, I think the first thing to really realize is that I'm not talking about this as me. I'm simply trying to take some of the best people who have been working on this, typically with the U.N. Climate Panel [United Nations IPCC, Intergovernmental Panel on Climate Change]. So, when you are asking what is my assessment, I'm simply answering: What is it that the U.N. Climate Panel is telling us. Because, I'm just working in economics. I'm not the science guy who has been looking at this. There's lots of economists who have been looking at this. What they find is: Global warming is a problem; it's not the end of the world. By the 2070s, the net impact of global warming will be somewhere between the equivalent of 0.2 and 2% of GDP [Gross Domestic Product]. So, it's the equivalent of probably 1 recession over the next 50 years. By the end of the century, unmitigated global warming might cost somewhere between 2 and 4% of global GDP. Remember: by then we'll probably be somewhere between 5 and 10 times richer; so, out of a 1000% increase, we'll still have to pay 2 to 4%. That's certainly a problem: certainly not the end of the world. Russ Roberts: A lot of people, though, worry about a worst-case scenario. There's increasing concern about extinctions; among young people there's a number of movements, as I'm sure you know, in the United Kingdom trying to mobilize nonviolent protests. There recently were some in Parliament. Do those worry you at all, those issues? The possibility of a more drastic impact? Bjorn Lomborg: Well, I mean, I think there's two things we should look at when we think about really bad outcomes. So, we think about really bad outcomes, so the very far out tail probabilities. One is to remember that any realistic policy that we are going to embark on in the next 50 years will have a trivial impact on climate change and hence also a trivial impact on the risks of these tail events. So, in reality, a lot of people seem to be saying, 'I really, really, really worry about this far out thing that could happen, like extinction of some sort. And therefore, I'm going to pursue very costly but incredibly ineffective policies.' That just simply seems contradictory to me. If you actually worry about the really far out tail events, you should be focusing on policies that could actually help you with those events. The only way to have a swift impact on climate change is through geo-engineering. Now, it's important to say I'm not advocating geoengineering; but I am advocating that we should look into it. Geoengineering is essentially putting sunshades on the planet, if you will. It's artificially manipulating the temperature of the planet so that it cools down. We know we can do that because volcanoes do it. Back in 1991 Mount Pinatubo in the Philippines emitted so much sulfur dioxide from one volcano that it reduced temperatures about 1 degree Fahrenheit for about 3 years. So, you can--and these were global temperatures. So you can definitely do this kind of thing. That is your only real way of avoiding dramatic bad outcomes. The other part of the conversation, the other thing you need to remember, is: If you really worry about bad outcomes, surely you don't just worry about bad outcomes from global warming. You worry about bad outcomes from a wide range of other issues. And I would still argue that if you worry about bad outcomes from global warming, you should worry about a lot of other bad outcomes--like terrorism, like bioterrorism; certainly the issue of an asteroid killing off large parts of the planet, which we know can happen. And many, many other things. And Bill Nordhaus, which we'll talk about later, who is a professor at Yale University and got the Nobel Prize in climate economics, the only economist to get that, he's actually written on this. And, one of his points was: we actually do have a reasonably good estimate of how much it's worth for most people to secure the planet. Because back in the early 2000s, NASA [National Aeronautics and Space Administration] was looking at: Should we protect the planet from asteroids? Should we look for near-earth objects that might hit the planet? These are basically extinction events; and these are real extinction events. We know that they've happened before. Probably have a risk of about 1 in 100 million years. So, not a high risk by any means; but certainly a terrible outcome. They could track either 90% or 99% of these earth objects. And the extra cost of tracking the 9% was not very high. Yet, Congress decided not to spend that. It was a couple billion dollars. Russ Roberts: [?] safe enough-- Bjorn Lomborg: Well, it very clearly tells you that we actually put a price on human survival. And, when Nordhaus does the calculation, it shows that we care somewhat, but not all that much about the planet. So, in that sense, if you worry about extinction events--which I think very, very unlikely in climate,--you should certainly also worry about it in other areas where it's much more likely; and where we also don't seem to be spending the resources. The last bit I'm sure we'll talk about later is the fact that human beings are incredibly good at adapting to many of these issues, which is probably one of the reasons why you really don't need to worry all that much about the far out, the far tail probabilities.

6:56 Russ Roberts: So, I'm a little bit skeptical of that. Actually quite a bit skeptical. I don't think we want to use the unwillingness of our bizarre and imperfect, by definition, political system to decide how 'we'--whatever that means--feel about, say, extinction of the earth. Why would you want to use that as a basis for how much we should actually care about or how much we actually care about the survival of the planet? I guess--I'd go to 99. I'm with you on that, I think. I think we are on the same page there: I'd want the 99% of the objects looked at. And I guess the question is what, in the worst case scenario of global warning, is there a policy that would be effective? As you point out, doing something because, just to do something, impoverishes us without reducing the risk--would be a mistake. But are there other things we could do, maybe the geoengineering field that we ought to be funding very seriously? Bjorn Lomborg: So, Russ, you are absolutely right: just because you don't worry in one case doesn't necessarily mean you shouldn't be worried in general. I was simply pointing out that we make these decisions a lot of places, and pointing out that we should be different only in climate and not in all the other areas seems to me to be inconsistent. And it certainly is not consistent with human behavior; and I think a large part of that is because we've actually over the last, 5-10,000 years succeeded pretty well simply because we said, 'Hmm. We'll handle stuff when it happens.' That does not seem like an intellectually very satisfying decision; but it turns out that it very often works. If, again, you actually want to protect yourself against runaway global warming of some sorts, the only way is to focus on geoengineering. And just to give you one example--and again, I think it's important to say, we should not be doing this now--partly because global warming in not nearly enough of a problem, and also because we need to investigate a lot more what could be the bad impacts of doing geoengineering--but we know that white clouds reflect more sunlight, and hence cool the planet slightly. One way of making white clouds is by having a little more sea salt over the oceans stirred up. Remember: most clouds over the oceans get produced by stirred-up sea salt, basically: wave action putting sea salt up in the lower atmosphere and those very tiny salt crystals act as nuclei for the clouds to condense around. The more nuclei there are, the whiter the cloud becomes. And so, what we could do is simply put out a lot of ships that would basically chuck up a lot of sea water, entirely natural process, and build more white clouds. Estimates show that the total cost of avoiding all global warming for the 21st century would be on the order of $10 billion dollars. So, remember: this is probably between 3 and 4 orders of magnitude cheaper. So, typically we talk about $10-$100 trillion dollars of trying to fix global warming. This could fix it for one thousandth or one ten-thousandth of that cost. So, surely we should be looking into it, if for no other reason than because a billionaire at some point in the next couple of decades could just say, 'Hey, I'm just going to do this for the world.' And conceivably actually do it. And then of course we'd like to know if there's a really bad thing that would happen through doing that. But this is what could avoid actually any catastrophic outcomes, not just cutting carbon emissions through more solar panels--which will, in any reasonable estimate have a negligible effect over the next half century. Russ Roberts: I want to come to that in a second, but coming back to the stirring up the salt on the oceans: first, I want to say there'd be a positive externality. I'd have been photographs; I love a cloudy sky. Especially white clouds, relative to a clear blue sky. Just my taste though. Could be the other way around for somebody. But I do think, as you point out, I think it's a wonderful opportunity for a foundation or an extremely wealthy individual, both to explore that option and to generate some data perhaps on whether it would work. Maybe it's not so feasible. Maybe it would take an enormous number of ships and it would have--you know, clog the oceans in different ways. Or as you point out, it may have other effects that we haven't thought about or don't know about.

11:30 Russ Roberts: But, I want to come to other forms of reducing carbon in a second. But before we do, I want to talk about the side effects of climate change. I think a lot of people--the reason I think there's an apocalyptic feeling among some, and I sense it among a number of young people, these days especially, who are very concerned about this--they see a lot of trends or at least they perceive trends that are alarming. There is a feeling that--I'll just pick a few; you can then just decide which ones you want to respond to. But, sea level is rising; sea ice is falling. Polar bears are shrinking population-wise. Droughts are getting more frequent. Flooding is more frequent. Hurricanes are more frequent; intense hurricanes are more frequent. Do those worry you? Do you think they are true? Bjorn Lomborg: So, you actually have to go through each one of them, because some of them are true. So, sea levels are actually rising. This is a very predictable--one of the best sort of indicators for global warming. And we're expecting by the end of the century that sea levels will be somewhere between one and three feet higher than they are today. But, remember: This is not the end of the world. It's a problem; and it's a problem that we know very, very well how to deal with. Many nations have already dealt with it--Holland being one of the obvious countries. This is something that you can deal with very, very cheaply. Also remember, over the last hundred years, sea levels rose more than a foot. And yet, if you ask most people what happened over the last hundred and fifty years, they are unlikely to mention the fact that sea levels rose as one of the century-long important issues. It's absolutely missed--because we dealt with it. Because, actually, most buildings on the coast or close to the coast certainly get rebuilt every hundred years. So, it's something that you can very easily adapt to; and something that we have very cheap technology to deal with. About polar bears: It seems very unlikely that we actually have good data that polar bears are decreasing. We've certainly seen a dramatic increase in polar bears from the 1960s, where polar bears might have had about 5-10,000 individuals in the world. Today we have somewhere between 22- and 28,000. Many, many more polar bears. And, there is no good evidence that they are actually declining. There's no evidence that it's decreasing. But, the important point here is: This is mostly because we've been much better at actually stopping shooting polar bears. But, remember: Right now, every year we still shoot somewhere between 300 and 800 polar bears. So, I mean, if you want to do something about polar bears there's a much easier policy: Stop shooting polar bears. If you look at some of these other things you mentioned: Droughts actually, the U.N. tells us there's low confidence in the scale, even, of droughts. And, for the United States, the U.S. Climate Change Science Program (CCSP; renamed USGCRP, U.S. Global Change Research Program) tells us droughts have for the most part become shorter, less frequent, and cover a smaller portion of the United States over the last century. So, we're simply wrong on droughts. Again, in the future, there's possibly going to be more droughts some places. Likewise, for floods: We're actually not even sure globally whether there are more or less floods. The U.N. Climate Panel tells us they don't even know: they have no confidence in the sign of the trend. Certainly, the cost of U.S. flooding has decreased over the last century--dramatically so. It's probably decreased from--a typical cost back around 1903 was about 2% of GDP. Today that cost is back to 0.2%. So, we've seen a dramatic decline in these costs. Likewise for hurricanes. We've actually seen fewer hurricanes hitting the United States, not more. And again, it's important because as you mention, a lot of people have the sense that there's more and more hurricanes. What they are actually seeing--and I think this is important to point this out, once again, is more the CNN [Cable News Network] effect: that we see more and more of every hurricane that happens. And so we get the impression that things are getting worse and worse. But really what we are seeing is, we are seeing more and more of it. Actually, if you look at the continental land-falling of hurricanes in the United States, both the--all the hurricanes have been declining, not increasing. And also the strong or the major ones that are Category 3 and over also have been declining, not increasing. And again, this simply bears repeating: We get the impression from media that this is happening more and more; but in reality if you do the numbers it's happening probably less and less. Certainly for hurricanes in the United States. But the reality here is we are getting a very bad picture from media, because we are only looking at how often do we hear about it. It's a little bit like back in the 1990s, if you remember, everybody talked about how there's more and more crime, while all the crime statistics were actually declining. But we saw more and more about these stories, about a person being raped or home break-ins, and all these terrible things happening. And they're really all true. But we're not going to be able to make good policy decisions unless we actually look at the data. And the data clearly told us back then we were seeing less crime, not more. And likewise, what we are seeing here is, typically, that we actually tackle climate catastrophes better and better. Not worse and worse.

17:32 Russ Roberts: Well, the Union of Concerned Scientists claims, "Recent research in this area suggests there has been an increase in intense hurricane activity over the past 40 years." They concede it's hard to measure. I'm sure they had to do some statistical analysis to figure that out and to try to isolate certain kinds of hurricanes. But, there are some--there are data points that are not as cheerful, I suspect, as the ones you are summarizing. Do you think that's true? Bjorn Lomborg: Yes. So, you can definitely argue that there has been an increase over the last 40 years. That's partly because you are starting at a very low-impact and you are ending up in a higher impact. You are also looking at a data set that we know is terribly skewed, because at first, 40 years ago, we had very little satellite information. So, you missed most of the major hurricanes. Whereas now you get every little hurricane that's delivering. And that's why there is a very good argument that land-falling hurricanes is much harder to mis-count. And that's my preferred message. But the reality here is, much more importantly to recognize it is very unlikely that we are seeing a dramatic increase. We've seen a small decrease in landfalling hurricanes. But it's very unlikely that we are seeing a major increase in any of these impacts. And, certainly, if you look at it from the account of, 'How much does this cost society?' we have seen a decline in all the major impacts. So, in U.S. flooding; in hurricanes; and certainly if you look globally on all weather impacts, you've seen a decline in cost from about 0.3% to now about 0.25%, since 1990--so, the last 30 years. Russ Roberts: And that's worldwide. Bjorn Lomborg: This is worldwide. Russ Roberts: You talk about how--it's a beautiful chart--climate-related deaths over the last century have plummeted. Bjorn Lomborg: Yes. Russ Roberts: And, regardless of what's going on in the climate--could be getting worse, actually--but we could have more hurricanes, we could have more droughts, more floods, and we could still have a lot fewer deaths, because we've adapted. We're richer. We have more air conditioning to deal with hot weather. We have stronger buildings because we can afford to make them stronger to deal with flooding, or hurricanes, earthquakes, and so on. Bjorn Lomborg: Yes. And, whenever I show this graph, people are just astounded. It's from the International Disaster Database. Which is the best database that we have. It certainly is under-representing the impacts in the early years of the last century, simply because there is less data-gathering. And yet, what it tells us is, in the 1920s, on average, every year, half a million died from climate-related deaths--like floods, drought, storms, wildfire, and extreme temperatures. Today, despite the fact that the world has quadrupled in population since then, the number is down to about 20,000 people a year. So, a 95% reduction every year. And as you quite rightly mentioned, this has very little to do with climate and everything to do about higher living standards. The fact that we pulled so many people out of poverty--because one of the worst things that can happen to you if you are in a catastrophe is that you are poor. Because then you can't adapt. You will live in a shanty town; you'll have cork[?] roof over your head. And then when a hurricane hits, it's going to hit you dramatically. That's why when a hurricane hits Florida, yes, it costs a couple of billion dollars and it kills a few people. But the same hurricane hitting, say, Guatemala, will cost a third of their GDP and will kill, you know, tens of thousands of people and actually demolish their economy for years to come. So, the real point here is to recognize that in any realistic world, we have become much, much more resilient to weather. And of course that tells us something. It tells us: If you want to help future people, dealing with climate change, how do you best do that? Do you do that by cutting carbon emissions and hence getting them a worse climate but a slightly less worse climate in 100 years? Or do you mean-- Russ Roberts: You mean a worse economy. You meant a worse economy, I think. You said a worse climate. Bjorn Lomborg: No; no, no. I actually--Sorry. If you cut--you also deliver a worse economy. But if you cut carbon emissions, you will still see carbon emissions go up. You will still see temperature go up. But not--by slightly less. So, you will have a worse impact on climate, but slightly less worse by the end of the century. So, there will still have to be many of these problems. Or, do you actually want to pull them out of poverty? Which will mean that they will be much better able to tackle anything climate throws at them. Plus, of course, it will be better for them in all other respects. They'll be less poor; their kids will die less; they'll have better nutrition; they'll have better schooling. All these other things that matter immensely. I'm always surprised by the way that people who are focused very much on climate really only think the knob that we can turn is the climate knob: We can cut carbon emissions or not cut carbon emissions. But the reality of course is: We can do a lot of different stuff. And we have to ask ourselves, 'Where can we, if you will, turn the knobs so that we help the world the most?' Not just 'Where do we turn the knob so that we cut carbon emissions? Because that's the only thing I care about.'

23:05 Russ Roberts: Well, I think that's a deep, and often the, the absolutely right way to think about it. Let me push back on that formulation with this policy that you are talking about. In the United States, we are of course, one of the larger, being a rich nation, with 330 million people, we put out a lot of carbon into the atmosphere. And we could change that in a variety of ways--the most obviously being attacks on carbon directly. We could also subsidize alternatives. We'll talk about that in a minute--that would perhaps reduce the rise or the rate of increase, or maybe actually decrease carbon emissions. And, we can do that. Congress can do it tomorrow. Um--but we are really not good at reducing poverty in the rest of the world. I don't think we know much about that. So, I have my ideas better to do that, better than I think other techniques; but I could be wrong. And the track record is really bad. We spend a lot of money trying to fight poverty--at least allegedly--trying to fight it with very little impact. Bjorn Lomborg: Mmmhmm. Yeah. So, uh, you are absolutely right. We could cut carbon emissions a lot. But, of course, the reality is: We haven't. Almost no state has done so very well. The perhaps obvious exception is the United States, because you basically discovered shale gas, and that has caused gas to be much cheaper than coals. So you switched from coal to gas. Especially in the electricity production. That's cut carbon emissions more than any other nation over the last 10 years. So, but, obviously, that had nothing to do with climate policy, whatsoever. But there is obviously a lot of ways that we can make people more resilient. Remember it's not just about pulling people out of poverty. But just to address the poverty point very head on: We know one of the best ways to pull people out of poverty is by allowing them to get into the global marketplace. If we could have more free trade, we could have much richer, much less poor people around the world. We estimate that had we successfully concluded the Doha Round--I don't want, you know, it's pretty much just dead now, but that was the big thing where the world could actually deliver more free trade. We estimate, had we just had a successful Doha Round, we could have lifted 170 million people more out of poverty. We could have made every person in the developing world about a thousand dollars richer, per person, per year, by 2030. That would do an immense amount more good for the world than pretty much any other policy you could imagine. But, of course, nobody talks about that, because there's way too many concentrated interests to tell you, 'Oh, don't have free trade.' You know, 'Subsidize my particular thing.' And there's very little general interest in focusing on free trade. Because, you know, the benefits are spread so thinly. And they are mostly for people who don't have a strong voice in the global community. But apart from all those, but apart from this very obvious policy we could also be focusing on just getting better food to people around the world. That would help them get richer by themselves simply because they would be, their kids would develop better, they would be more alert in school, they would learn more and they would become more productive as adults. We could do that, by, for instance, getting GMOs[? Genetically Modified Organisms] out. But also much more uncontroversially just increase the level of investment in research and development into yield increases, which would deliver much more food per acre or hectare that you'd be covering. And there are many, many other policies that we could do like these, that are just sort of fairly cheap and incredibly effective. So, yes: I do take your point that we could do CO 2 emissions. We haven't done it, really, neither in the U.S. Congress or anywhere else. And, we could actually, likewise, be doing some other policies--by the way, we haven't done anywhere, either. But that would be much cheaper, much, much more effective, and would help many more people, much better.

27:18 Russ Roberts: So, I’m sympathetic to the idea that this is not an apocalyptic crisis. It's just something to be concerned about that we will probably adapt to with relatively low cost. But there are people who argue that there is this small risk of a catastrophic event, and that we ought to respond to that. And I think it's really powerful to realize what we've just said, which is, 'You know, we haven't done anything, really.' Besides creating a lot of income for people who write about it, and research it. Which is--I'm not against that; we've learned something. But that's one of the impacts. But it's striking to me that the decentralized, bottom-up solution of shale and fracking has had the largest impact. The political process has totally failed. And it's not just totally failed--I think it's important to point out that it's totally failed in a media environment that is constantly beating the drum for what the risks are. Hollywood is constantly making movies for how creepy it is. A number of prominent American politician have urged urgent action. And yet, it's not just, 'We haven't responded as well as we could.' I think we've kind of done nothing. Which should give one pause. I think one way to think about that--a worrisome possibility--is that we as human beings are just not good at taking action that is going to have consequences--excuse me--taking action and fixing things that aren't going to happen for a while. And, as you point out, you could argue it's way too late anyway. It's kind of too late. I don't think that's true. I think there are extraordinary things that could happen, many of them unforeseeable. Like fracking, which is certainly unforeseen, 25 years ago, by most people, if not everybody. And, you know, maybe we ought to be putting some bets on some wildcard--geoengineering, subsidies to some crazy--maybe a giant prize--for alternatives to fossil fuel, energy sources. I mean, I think this is what [?] should be doing. But even those aren't being done. Even those, sort of, 'Well, let's have this in our back pocket, just in case.' So, as an observer, I'm tempted to say, 'This is all just a waste of time even talking about.' But, I do find it--there is a possibility that we just have our heads in the sand. Even though I am sympathetic to your basic point. Bjorn Lomborg: Mmm. I think there's a number of very correct points in there. Nordhaus estimates that right now the world has implemented climate policies that are equivalent to having $2 in tax on a ton of CO 2 . And now, remember, most estimates would imagine that we should be up to, say, $30 or $40 per ton of CO 2 . So, clearly those-- Russ Roberts: And those--wait a minute. So, those taxes are things like gasoline taxes that were put in place 50 years ago for highway building. Not to fight global warming, right? Or is he talking about on top of that? Bjorn Lomborg: Well, heh, it's murky. Because honestly we have done very little. I think it's the marginal cost. This is what he--he's the only guy, I guess, who has had the audacity to try and estimate this for the world. The OECD [Organization for Economic Cooperation and Development] did an estimate of carbon taxes around OECD and found that there are several thousands of CO 2 taxes on different fuels, and different situations; different policies. There's all kinds of things. So, the reality is it's very, very hard to estimate. But, you are absolutely right: Fundamentally we have done very, very little. On the other hand, it is also important to say that we are spending a lot of money on climate policies. The EU [European Union] is proudly saying that they are spending 20% of their budget on climate policies. The world is spending, probably around $150 billion dollars in subsidies every year just on solar and wind and a few other things-- Russ Roberts: So, I was too pessimistic! We are doing something! Okay! Great! Bjorn Lomborg: Well, yes-- Russ Roberts: That's the good news-- Bjorn Lomborg: So, in some sense, we are spending lots of money. But we are spending it where we know it will have pretty much the smallest impact. And that's what's really depressing about this conversation: That, to a very large extent, climate is much more about [?]: People who worry about global warming to get them to feel good about themselves: 'Oh, see. All these solar panels. Oh, wow, we are really doing something.' Whereas, of course, it has negligible impact on the total temperature range. As I pointed out, even if we stopped using fossil fuels, you would only really see the divergence in about half a century, in temperature outcomes, simply because it's a very, very--I don't know how to put that. The system has a huge amount of inertia in it. So, there's a lot of sort of trend in temperatures built into the system. And in any realistic outcome, we are simply not going to make a difference before the end of the century. So, that's why if you really care about things changing rapidly, the only thing you can do is geoengineering. But, more realistically, I think that the take-home point from the fracking that we were just talking about is to recognize: The idea of doing global warming by telling everybody, 'This is terrible. So, could you please all do stuff that you don't individual want to do, that's going to be really, really costly.' And, as you could see, for instance, in France, if you just do a little bit of it, it starts, you know, losing you, you are a majority. That is always going to be a loser. What you can do, and what we should be focusing on is much more getting policies that will actually develop technologies that are market-friendly, that people will want. So, a little bit like fracking. Everybody would like to have cheaper gas. Imagine if we could make cheaper solar panels, cheaper wind turbines, cheaper batteries, cheaper fusion-efficient, and these many, many other technologies. Imagine if we could make a green technology so cheap everyone would just buy it. Not because it was green, but simply because it was the cheapest energy. Then, of course, we would solve global warming. That's why the only real way we are going to fix this problem is by coming up with a technology that is so cheap that everyone, not just rich, well-meaning Americans and Europeans, but the Chinese, the Indians, the south--the Latin Americans--the southeast Asians, the Africans will buy this technology. That's why-- Russ Roberts: But isn't-- Bjorn Lomborg: our research shows the best investment is by far to invest in research and development of green energy. Because there's a huge underinvestment in this area. Just like there is many other areas. This is a market failure. You don't invest in these technologies because it's very hard to reap the long-term benefits, or at least reap the full long-term benefits, from a private patent because that patent will have run out by the time that will have a huge global impact. And so there's a huge public benefit, but not a private benefit. That's why we should spend much more money; but still much, much less than what we are spending on climate policies and investing in research and development. Both make the world a safer place for climate. And it would be much cheaper and much better, and also, hey, give us better energy technologies.

35:00 Russ Roberts: Isn't that where a lot of that $150 billion worldwide is going, though--toward subsidizing research in those green technologies? Bjorn Lomborg: No. No. You would imagine. But no, unfortunately almost all of it goes to spending it on known inefficient solar and wind. Right now. We are putting up a lot of it. And we need to subsidize it because it's inefficient. Now, the effect of putting up lots of it is that we give money to these companies that will then invest some of this money in research and development into making better next-generation solar and wind. That's great--but, you know, say we spend-- Russ Roberts: Wrong way to do it-- Bjorn Lomborg: $150 billion[?] dollars. If you spend that, and that means those companies spend $5 billion on research and development, why the hell wouldn't we have spent the whole $150 billion on the right investment--namely the investment in research and development? And also, remember: They are only going to spending on innovation that they know they can monetize in the next 5 years. We need to spend it in a way they will monetize it for human civilization over the next 50 years. That's probably also a somewhat different tack. Russ Roberts: What I really like about you, Bjorn, is that you care about the numbers, and, uh, a part of me recently has gotten increasingly disturbed that we as economists spend too much time on the numbers because we tend to ignore things that can't be measured. But, in areas we are talking about, numbers capture a lot of what we care about. Not necessarily in the right magnitudes. We are talking about loss of life. And we are talking about cultural loss--which are, these are hard to measure. But when you are talking about people, just, say, dying: you have different ways to save people from dying. You want to save more than fewer. That's the only part of the--if all else is held constant, that's the utilitarian piece of me. And you argue that, uh, we have lots of other things that people die from right now that are really--we could do something about. And yet we tend to focus overwhelmingly on climate change as the single most important environmental issue. It may not be. Bjorn Lomborg: Yeah. You are exactly right. And, and, [?] I share with you the idea that cost/benefit analysis is by no means perfect. It doesn't encapsulate everything. But again, I think of it more as a menu for society. So, basically, you know, we put on the prices and sizes: what are you going to get if you order this item on the menu? How much will it cost? What are the calories? What's the salt content? And, you know, we're the kind of guys who take a look over the menu and say, 'You know what? Spinach is really cheap and it's good for you. You should eat that.' And you might not like spinach. And that's fine. But at least it's a good way to give you an indication of what works. What is important. And certainly, when you are orders of magnitude out, I think the numbers can definitely help you. Just to give you a sense, the--Nordhaus, as I mentioned earlier, the guy who got the Nobel Prize for climate economics, he's actually done a cost-benefit analysis. And climate, again, you can disagree with it. You can say maybe he hasn't included everything. He has certainly tried to include also these far tails and everything. He finds that what we should do is put a higher tax on CO 2 than we have today; we should do that globally. If we manage to do this globally--efficiently--that is, coordinate a single carbon tax across all countries from China and the United States and the European Union, and Latin America and Africa and everybody else, across the entire sanctuary, we can actually cut temperatures by more than 1 degree Fahrenheit. Remember: that still means we are going to be seeing almost as much temperature rise as we would have seen had we done nothing. And what he also shows is that if we do much more than that, what probably all politicians are talking about, not only is it going to be impossible--you know, the 1.5 degrees Centigrade that everybody talks about is just not doable--but if we try to just approach that with doable policies, we are going to end up spending much, much more money than the benefits we are going to create for future generations. And I think it's important to emphasize: The guy who got the Nobel Prize in climate economics tells us we should do more than what we are doing today. But if we do a lot more, which is what all politicians are arguing for, we'll actually end up making the world worse off. That's a bad deal. And that's something we should take care of. Russ Roberts: Well, yeah, um-- Bjorn Lomborg: Of course, as you just pointed out--sorry. Russ Roberts: I'm going--let me respond to that. And then you can add what you were going to say. I don't think everything that's important in that calculation is monetarily measurable. I don't think we get the tails right. I doubt he gets the tails right. And I guess, just to take a trivial example, if we lost all the wildlife in the world--and let's assume that has no impact on human wellbeing directly, but we just couldn't enjoy it; and all we did was destroy the, kill all the wildlife in the world--let's say, big fauna. That would be a tragedy that I would have trouble putting a monetary value on. It's kind of like, um, kind of like Notre Dame, the cathedral which tragically burned down yesterday. Not to the ground--some of it was saved. It can probably be recreated in some fashion, maybe quite accurately, by the way. It could be a really interesting emotional question whether a replica of the spire will be okay--especially if you are a Catholic, if you are a French person. You know, is that going to be an acceptable change? And, you know, I don't know the answer to that. But I wouldn't want to just say we'd look at the monetary cost of that repair to be the effect of the fire. So, there's some things here that can't be quantified. And my claim-- Bjorn Lomborg: Oh, absolutely. Russ Roberts: My claim is, even though I like your menu argument, and I did it myself in defense of cost-benefit, when things aren't on the menu it's really hard to remember them. And, I just--I'll just mention that. Bjorn Lomborg: Oh; sure. And, look: I think, just on your precise argument on losing all wildlife, all other species--that just seems--partly I just can't see any mechanism by which we would actually see that happening. But also, again, if you actually want to conserve wildlife, it's surprising that most people are talking about global warming, whereas, of course, the real impacts are that we are losing a lot of land for human agriculture. One of the ways that we could avoid that is by making agriculture more efficient, so we would use less of it. That's what happened in much of the rich world; and that's what we need to happen in the poor world. It's about[?] invasive species; it's about setting aside places to protect some of the things that we really care about. Those are the effective policies; and we know those are effective, and much, much more effective. So again, even if you care about some of these things, I think you really have to look hard on whether you are getting your value, also, in terms of species, from climate policies. But, let me just--because as you also alluded to--one of the things that we try to do with Copenhagen Consensus, which is a think-tank that gets together a lot of the world's top economists who look across a wide range of areas and say, 'What are the cost-benefit analyses for all these different things that we could do?' So, basically make the menu for humanity: where can you spend a dollar and do the most good? And what we try to find is, there are some amazing things can be done; and there is a lot of pedestrian things; and there are also a lot of really stupid things--but we don't actually work all that hard on finding them, because there are still a lot of amazing things that we want to emphasize. So, just to pick out a few of those which you rightly talked about that are just about saving human lives, expanded immunization: We know that for about a billion dollars, the world could save a million kids every year. That's a thousand dollars per kid. We estimate that every dollar spent. We estimate that every dollar spent will do $60 of social benefit. That's an amazing thing. Tuberculosis: tuberculosis is sort of the forgotten disease. Everybody talks about HIV [Human Immunodeficiency Virus] or malaria. Tuberculosis is actually the world's leading infectious disease killer. And we've known how to fix it for a hundred years. So, the reason why we don't spend all that much money is because it's old, boring news. But the reality is, we could save so many people with very little cost that we estimate that every dollar spent would do $43 of social good. Likewise, there's many other things you could do with better heart attack medication. We know that that works very well in the rich world: Get that out to much of the poor world and you could do amazing amounts of good. But--and this is important--we also try to look at a lot of the things that don't specifically involve making people not lose their lives. Because, as you point out, there are many other benefits, obviously, the free trade point that I made with the successful Doha Round would be an amazing achievement: basically would have to pay off rich Western farmers, but we'd create immense social benefits for the rest of the world--we estimate every dollar spent would perhaps do $2000 of social good. But, also, we could look at universal access to contraception: about 215 million women still don't have access to contraception. If we could get that--and it would probably cost about $6 billion dollars a year, we could have these women mostly have kids when it fits in their time schedule. So they would simply plan their kids better. Typically that also means you space them better. That means your kids don't die as much. It means moms don't die as much in childbirth--so we actually estimate it would save about 150,000 women from not dying, about 600,000 kids from not dying. But it would also generate more economic growth because there would be more capital per kid; they would be more taken care of; they'd learn more in school, so on. So you'd get a demographic dividend. Every dollar spent here would probably provide about $120 of social benefits. And just one more thing: we talked about nutrition earlier on. We know from earlier experiments back in the 1960s: If you get kids good nutrition, their brains develop more so when they go to school, even if it's a crappy one, they will learn more in that school; and when they become adults they'll become more productive. They will actually be surprisingly more productive. They'll avoid a loss of income of about 66%. So, we actually estimate for every dollar spent on early childhood nutrition, you get $45 back. Also, half[?] coral reef loss--for instance, as we talked about protecting some of things that we just care about because they are beautiful--will not only mean that there will be more beautiful places for you to visit, but it will also mean that there will be more fisheries, there will be more employment, there will be more sustainable tourism; we estimate every dollar spent on protecting coral reefs will produce $24 of social good. So, there are lots of this. We actually have a whole list of this, and we have a huge book and all that stuff; you can look at it on our webpage, copenhagenconsensus.com. But the truth is: There are lots of great investments where you can spend a little bit of money and do an amazing amount of good. And that's why I'm so concerned about the fact that we almost only talk about the policies like climate, and a few other policies, that cost an enormous amount of money and does very little good. Because at the end of the day, when people look back at what we did, 50 years from now, they are not going to say, 'Oh, wow: they talked really beautifully about these problems.' They are going to say, 'Did they actually fix problems that were relevant for me?' And the answer is: We can do a lot better than what we are doing right now.

47:01 Russ Roberts: So, I'm very skeptical about all of that-- Bjorn Lomborg: Hah, hah, hah. Go ahead. Russ Roberts: I salute your desire to improve people's lives. And I salute your attempts to try to quantify those gains. Just to take one of them: It's not obvious to me that, let's say, providing free food, just to be dramatic, to people around the world--if we could do that, which we can't. But if we could, if we subsidized American farmers and gave away enormous amounts of food to the poorest people in the world, they'd have more food. But we'd do some things to their local economies that are--given that their economies are not as dynamic, their labor markets aren't as dynamic--that might not be so good for them. And I have similar thoughts about--even things that I'm in favor of, like getting rid of tuberculosis and other forms of health improvement; you know, I'm all in favor of those; I think they are wonderful. But, in terms of measuring them, you know, if you start changing people's health and giving people access to contraception, it's not obvious how those things are going to interact. They're not going to probably have the same number of kids as they had before. Quality of life will probably be better--that their kids don't have tuberculosis, not as many would die. But it's going to change the birth--it just, it's very complicated. That's all I want to just say. So, I'm all in favor, though, of health opportunities. But I do think it's important to think about what we can do to help other people who are poor help themselves. And minimize what we do to them; and encourage what they can do for themselves. Our attempts to do things for them, our presumptions that they don't know how to do certain things are often wrong. A lot of times the choices they make that look stupid to us turn out to be quite smart. We just don't have all the information. So, I just would counsel some sort of humility there. But I also-- Bjorn Lomborg: Absolutely. Can I just--sorry, can I just, because I think it's important to have that conversation-- Russ Roberts: Sure. Go ahead. Bjorn Lomborg: And just, on a few of these things. For instance, it would be terrible if what we did was, you know, we subsidized a lot of American farmers, we sold a lot of these, of this food, and the local market destroyed the agrarian economy to help more kids being well-nourished. But, fortunately, that's not what we're suggesting. There's a number of ways that you can do the very, very effectively, for instance by getting micronutrients into, uh, so fortified wheat and flour, or if it's rice or whatever it is that is being used in this local economy. So that's basically about subsidizing very, very small bits. Because, for each individual flour mill, it costs a little more to put this fortification in, but it will actually help immensely. When you look at giving out food, you are absolutely right. If you just try to give out food, that's typically very expensive and doesn't work all that well. One of the ways you can do that is by getting out more information, because that's much cheaper. We know that a lot of people underestimate--actually, also in the United States and elsewhere, but it's less of a problem because of fortification. But, getting the information out that it's incredibly important that your kids eat well the first two years--that's very cheap and will give them a huge opportunity in the future. As you point out, this is not about doing, you know, helping them in all their ways. It's about allowing them to help themselves better. But one of the ways that we right now see a lot of people around the world--a lot of kids around the world--they are stunted. Which is a good indicator--they are basically shorter than they should be for their age. And, the reason is that they permanently had a little bit too little and a little bit too poor food to eat. That basically means that for the rest of their life they are stuck in a lesser ability of doing what they could have done well. So, it's really about making sure that they can do the full opportunity. And we know some of these things; we should absolutely be looking at exactly how do we do that-- Russ Roberts: yeah-- Bjorn Lomborg: but we can do it in a way that helps them a lot, with very little impact-- Russ Roberts: but-- Bjorn Lomborg: So, absolutely, we shouldn't just be barging in there. But there are really smart things that we can do that would have huge impacts at fairly low cost. Russ Roberts: I'm going to tap into my inner Nassim Taleb and point out that fortifying things, especially with GMOs, may have unintended consequences down the road. But, hard to know. But, I do think-- Bjorn Lomborg: So, I was not suggesting fortifying it with GMOs. But, we know fortification; we are doing that in many places in the developed world. Certainly, most people are doing it themselves by taking a vitamin pill. So, for instance, zinc and iron, about 2 billion people lack iron. And it simply makes them less vigorous than they otherwise would have been. And, just simply providing iron is probably one of the cheapest and most effective things we could do for the world. And, you know, one of the ways we could do that is by fortifying flour. We've done it plenty of places. There's absolutely no issue that that would be dangerous. But we do know it would avoid anemia and hence, you know, make people more productive.

52:12 Russ Roberts: It might be true, in that case. I guess the other issue, which I'm uneasy about, is the phrase 'What we know.' We don't know much about nutrition. We have a very mixed record of having elite scientists, nutritionists tell us what's good for us. Now, I think there are some basic things we do know. And I think you are 100% right that there are, tragically, children growing up in poverty everywhere in the world who don't get a chance to thrive and flourish the way they could if they had a different diet. But, I'm always a little uneasy with the top-down approach, because-- Bjorn Lomborg: Russ, let me just tell you one story-- Russ Roberts: skin in the game-- Bjorn Lomborg: Let me just tell you a story that I think is amazing and that everybody ought to know this one-- Russ Roberts: Go ahead-- Bjorn Lomborg: Back in the late 1960s, early 1970s, some researchers went to Guatemala. And found two small rural villages nearby each other, so identical in pretty much all respects. And they gave one village--they gave the kids there, good food with protein. The other one only got sugar water. Now, obviously, you couldn't have got this past the ethical board today. But the amazing thing is, that some of our researchers re-found those kids back in the early--not so--you know, when they were late 30s or early 40s. And this is about 2,500 kids. And you could totally tell the difference on the impact. So, again, this is not the kind of thing where we discuss, as calories bad for you and is fat better than, you know, sugar, or whatever. This is just simply: We know that these kids had much lower chance of being stunted, and on average these kids had better marriages, better jobs; if they were women they had fewer miscarriages, fewer kids. But crucially, if they avoided being stunted, they had about 60% higher wages. So, we know--and that's the stuff I was telling you. This is the world's longest-term study. And of course you can't do this again today. But we have very good knowledge: It's just a better idea to get more protein than getting sugar water. And I don't think this is in any way surprising-- Russ Roberts: I'm not-- Bjorn Lomborg: so we're not talking about-- Russ Roberts: I don't deny that. I don't deny that. I think that's inevitably true. Although, I'd like to see the data. I'd like to see the magnitudes. But I think the question is, if you try to implement that on a larger scale--right? No doubt, protein when you are young, better than not having protein when you are young. Calories, even when you are young better than not having any, as long as it's not too many. But, how to implement that, how to make that happen, is challenging-- Bjorn Lomborg: sure-- Russ Roberts: That's all. Bjorn Lomborg: Yep. Yes.

55:00 Russ Roberts: Let's talk about your book, The Skeptical Environmentalist. I want to go down memory lane for me, and tell you a story about when I first found that book. The book came out, I think, in 2001. Right? Bjorn Lomborg: 2001. Yep. Russ Roberts: So, I get the book. Somebody told me about it. And it's--you channeled--the book is in the spirit of Julian Simon. And others who have, in a contrarian way, said, 'Actually, no; the world is getting better in a number of ways.' And you did that in a very powerful way. It was a beautifully designed, visual book. And I remember when I read it, it was electrifying for me. I called a friend of mine, and I said--I look back on this with some embarrassment, but I'm just going to tell you the history--I said, 'We're going to win.' And by 'we' I meant, and by 'win' I meant: Those of us who understand that the world is really not nearly as bleak as it appears, the data is just so overwhelming. And it was such a powerful, visual and analytical attack on the doomsday approach. And, in those days, I was an incredible optimist. And listeners know I've become less optimistic over time. I also believed that people are rational: that when they saw your evidence, they'd just go, 'Oh! I was wrong.' And I also thought that my side had all the good numbers, and the other side's numbers were all bad. So, I've lost most of those views in the last 18 years. But, your book was a tremendous achievement. And it was a, a really important call to the world to say, 'You know, it can feel depressing sometimes, but there are at least some numbers, and maybe most of 'em that are pretty cheerful.' And I, I salute you for that. And you took an enormous amount of flak for doing that. And I just would like to get your impression of what that book achieved and how it changed your life. And how you've dealt with the responses to it. Bjorn Lomborg: Yeah. You are absolutely right. That, you know, I did this book, actually mostly for myself. Because I have, the very standard sort of Western, somewhat left-wing worry, Greenpeace kind-of approach, 'Oh, things are falling apart, and things are getting worse and worse.' And I was inspired to read the book [?] because I read an interview with Julian Simon who said, 'That's actually not true.' And 'Go and check the data.' And that was basically what this book was an outgrowth of: Checking the data and realizing that on most of the important areas, things are getting better. As you say, there was a lot of flak. And when I think back on it, I'm sometimes astounded. I know that here in Denmark we had a local editor, what you could reasonably call the New York Times of Denmark, sort a slightly left-leaning, very reputable newspaper: He published the first articles with me. And he basically said, 'If I'd gotten the same kind of flak, I would not have been able to stand up.' And I was always surprised about that, because he was a really strong guy. And yeah, he was very sure of his opinions and willing to take a lot of, you know, flak for things. And I think, what never dawned on me was that when people are sort of thrown off by people, by other people saying, denouncing you and saying, 'How dare you write these things?!' the only story that I ever hear is the story that they apparently tell it at Harvard Business School--sorry, Harvard Law School--where they say, 'If you have a strong case, pound the case. If you have a bad case, pound the table.' All I heard was people pounding the table. And it was never sort of, 'That's not an argument. Show me some numbers that indicate this is wrong.' And that's really the approach that I still have. And that I think most academics probably have to most issues. This is not a popularity contest. I don't care whether you like me or not. I care whether you have better numbers that show something else. And that's why, you know, when I talk about global warming, I think you just have to point out: Look, it is a problem. It is by no means and in no respect the end of the world. And this is about asking how much can you do. If we are going to spend a lot of extra resources, is this really the place where we can do the most good? Just to give you a sense of proportion, the Paris Agreement, which everybody, at least in principle, have signed up to in the world--and even the United States has signed up until 2020--will cost, probably between $1 and $2 trillion dollars per year. And it will achieve absolutely nothing. You won't be able to measure the impact in a hundred years. That is probably a pretty terrible way of spending about $80 trillion or so dollars over the next half century. So, I would suggest that we should think about how we spend it differently. Now, if people get all apoplectic about that and say, 'You can't say that. That's not allowed,' and 'We should be worrying much more about--,'; well, good on them. I simply want to point out there are good data; and some of the best economists tell us there are amazing places where we could spend our money instead. And that's what we should be doing. So, my reaction from the whole, you know, Skeptical Environmentalist, and I'm very, very pleased and thank you very much that you have enjoyed the book, I'm a little disappointed that you might have given up on a lot of these, uh, these uh points, though. Because if we look at the general issues that really matter for people--that is, how long do you live? And how much income do you have? And what's the state of your environment? Those are typically some of the three best indicators of what is the welfare of human beings. They are pretty much all increasing. They are all getting better. Now, we could still wish that they were getting even better, and I'm trying to point out that we waste a lot of money under bad policies. But, overall, despite all of this inefficiency, we are still getting better. And so, my goal is life is not contesting that. It's simply about trying to make it slightly better than what we are doing right now. Which is pretty damn good.

1:01:48 Russ Roberts: Yeah. The reason I'm a pessimist, by the way--and when I say that I've become more pessimistic--isn't because I think the trends have changed. I think, on all those trends, they are better. I think human wellbeing, material, in terms of standard of living, is extraordinarily better than it was 17 years ago, 18 years ago, and that's despite the worst recession of our lifetime. It's--enormous numbers of people have been lifted out of poverty, in China and India and elsewhere, Africa. In America. Despite the claims of others, I believe that the average person is doing a lot better. People still fight and risk their lives to come here, to be in America, because I think they realize, correctly, that their lives will be more--they will flourish more here. So I think that's all true. I think--I think we live longer, "except for the opiate crisis"--for, I think it's women. But we've lost something there. And in terms of the environment--mostly--the air is cleaner and almost, and again, in the developed world and improving in the developing world, but in the developed world there's such improvement in places like Los Angeles. Through both government regulation and private ingenuity and in terms of efficiency improvements like fracking that we were talking about or finding ways to produce, say, soda cans with less aluminum. And incredible things that creative people do. We have more forests. And the air is cleaner. Our water is cleaner. Now, it's true, the temperature is getting a little bit warmer. It may get warmer still; and that is something to be worried about. But, overall, human wellbeing is fantastically better. And yet, those are on the things that we can measure. And I'm not going to say we shouldn't measure them. I'm not going to say that they don't matter. They matter a lot. But they are not the only things that matter. And I'll just--to pick on you for a sec, when you said the three things that contribute to human wellbeing are income, life expectancy, and your physical environment: For sure, those are all really important. As are the connections we have with others. As are the feeling of mattering. The feeling of dignity. The sense of belonging. A sense of connecting to other folks. Love. All those things, I don't think we're doing so well on, lately. Now, we could argue: 'Well, we don't know how to fix those.' That's okay. Or you could argue, you could argue that some of those gains have led to some of those losses, and that we ought to be aware of those. And I think the natural tendency of economists--well, I know the natural tendency of economists. They say, 'Well, I don't,'--the way I phrase it is, 'There's no, um--dignity isn't measured in the data set, so I can't--I'm just going to have to leave that out.' But, if you leave it out and it's the most important thing, you've left out something really important. So, I think the challenge for us as policy influencers, or policy makers, or people who advise people in government, is: keep in mind that what we can measure isn't the whole story. And the human enterprise is a rich and complex one. And, our natural tendency is to not just say, 'Well, I can't measure this, so I'll have to weigh that against it,'--which I say, used to say, as an economist, and I hear you saying. Our natural tendency is to say, 'Well, if I can't measure it, I'm not even going to think about it.' I know that's wrong--intellectually, rationally I know that's wrong. But I think that's the human tendency. And I'm increasingly concerned about that. Bjorn Lomborg: Hmm. Yeah. So, I think you both made a very eloquent argument for why things are in general getting better; and I think you are absolutely right, that we should be concerned about all the things that we are leaving out. As you also point out. And we have some good technologies and techniques to make sure that we at least leave them out less. So, for instance, we did a lot of study in India on toilets, which is a big thing in India. And we tried to look at what's the cost and the benefits of doing that. And one of the things we kept hearing was, 'You know, there's a huge amount of dignity that goes into being able to go to a toilet instead of sitting outside, and defecating with others. Especially for women: there's also some risk of rape.' And all those kinds of things. But we also have a reasonably good estimate of what people are willing to spend, and especially what they are not willing to spend. So, you can ask them and get a sense of how much is that dignity worth. But I absolutely agree with you, that when all things are said and done, you can have a pretty good first sense of what the menu is. But you have to remember that this is not the only thing. But, it's certainly also is a big thing compared to what much of the conversation in the--the policy conversation that we have pretty much everywhere in the world seems to be much more directed by who had the cutest animals or the most crying babies or the best PR [Public Relations] Agency. And surely that's not the way to do this. So, I would surmise that while we are still missing out something and we have to work really hard, and we'll probably never get all the answers, having at least part of that answer, and certainly having an order of magnitude is incredibly helpful, instead of just being driven by, you know, this one story or this one meaningful meme that seems to be driving a lot of our conversations.