DEVELOPMENT SPENDING:
Economists Rate Greenhouse Gas Curbs a Poor Investment

COPENHAGEN--Feel like throwing your tax money away? Invest in measures to rein in global warming. That's the controversial conclusion, at least, of a workshop here last week that brought together a varied group of economists, including three Nobel laureates, to analyze spending on global problems.

Participants of the "Copenhagen Consensus" weren't purely naysayers: They lauded, as money well spent, initiatives proposed to combat AIDS, malaria, and malnutrition, for example. "This will help us focus on the more important problems," says workshop organizer Bjørn Lomborg, director of the Environmental Assessment Institute in Copenhagen.

Many scientists don't buy that argument, however. "We shouldn't be spending less on climate change so we can spend more on sanitation. The problems are interrelated," says Stephen Schneider, a climatologist at Stanford University, who labels the workshop's premise "phony and a distortion."

The stated premise was that the industrialized world has limited funds--about $50 billion a year--for aid to developing countries and no objective way to set priorities. According to Lomborg, author of The Skeptical Environmentalist--a 2001 book that sought to discredit a host of environmental concerns (Science, 2 January, p. 28)--"eco-myths" such as global warming "prevent us from acting rationally" when committing resources to improving the world. It would be better, he argues, to base spending on cost-benefit ratios. Measures to stem climate change should compete for development aid, Lomborg suggests, because according to predictions "the developing world will suffer most of the damage from climate change."

With backing from the prime minister of the right-leaning Danish government, Lomborg invited the nine economists who attended --including Nobelists Robert Fogel of the University of Chicago, Douglas North of Washington University in St. Louis, Misouri, and Vernon Smith of George Mason University in Fairfax, Virginia--to rank solutions to pressing problems according to their likely return on investment. Experts, chosen by Lomborg, argued for and against each of 10 "challenges" (see table).

The 10 Challenges
Armed conflicts
Climate change
Communicable diseases
Education
Financial instability
Governance and corruption
Malnutrition and hunger
Population and migration
Sanitation and water
Subsidies and trade barriers

Laying out the case for climate change was William Cline, an environmental economist at the Center for Global Development in Washington, D.C. His primary evidence was the 2001 report of the Intergovernmental Panel on Climate Change (IPCC), which predicts an increase in average global temperatures of between 1.4º and 5.8ºC by the year 2100. Lomborg acknowledged that the report is "the best of our knowledge on climate change." The economic benefits of stemming global warming include protecting the lives of income-generating human beings as well as arable land. Steps to limit warming center on reducing emissions of greenhouse gases such as carbon dioxide, a tenet of the Kyoto Protocol. The most cost-effective strategy, Cline argued, would be a global carbon tax, more aggressive than the one called for under Kyoto, that would halve greenhouse emissions by the end of the century.

Stacked deck? Bjørn Lomborg (right) with Danish Prime Minister Anders Fogh Rasmussen. CREDIT: BJARKE ØRSTED/EPA/AP PHOTOS

That leaves scientists such as Schneider, a lead author of the IPCC report, fuming. "Climate change is not an economics problem. It's an ethics problem," he says. Adds John Holdren, an environmental policy expert at Harvard University, "One can't help suspecting ... that Lomborg has stacked both the participants list and the framing of the questions to achieve this result."

Lomborg rejects that charge, arguing that the workshop's organization was "unbiased." He acknowledges, though, that the panel was short on environmental expertise. "I invited other economists," who declined to come, he says, dismissing his critics as "conspiracy theorists." Lomborg plans to distribute the panel's conclusions to governments and to the United Nations.

Illustrating how influential Lomborg is perceived to have become, environmental economists convened an alternative conference, "Global Conscience," in Copenhagen last week to discuss sustainable development. "We shouldn't choose between poverty eradication and prevention of climate change," says co-organizer Christian Jørgensen, chair of the nonprofit Danish Ecological Council. "Prevention of climate change will pay off; it will reduce our dependence on Middle East oil, and it will create a new industrial sector for renewable energy and energy conservation." Clearly, economics alone won't reconcile these sharply divergent world views.

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Volume 304, Number 5676, Issue of 4 Jun 2004, p. 1429.
Copyright © 2004 by The American Association for the Advancement of Science. All rights reserved.