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male speaker:--introduce bjorn lomborg now a longconversation about how to make the worlda better place. most of you may knowmr. lomborg's work through with the "skepticalenvironmentalist"

heart attack pills, book that he put out, 2001,2002, so some years ago. obviously quitecontroversial at the time and probably to date,with a focus on climate change and how best to addressthe problems of climate change.

and arguing, to some degree,that climate change per se wasn't necessarily thelargest environmental issue that we faced. he's continued to work in thespirit of using economic tools to try and address questions,both environmental change and developmental challengesthat we face around the world. and is currentlyworking on a project to figure out howthe world should best spend the next $75billion dollars that we

may be investing in thecause of global development, working with the united nationsand countries around the world. we were talking a little bitaround the margins about some of the challenges ingetting into that process. but i'm delighted tohave him here for what i'm sure will be a provocativeand informative discussion. so with that, bjorn. bjorn lomborg:thank you very much. [applause]

thank you. it's great to be here. and i would love to talk alittle bit about how we're going to think aboutprioritizing big issues. so as you mentioned,i've worked a lot within the environmental area. but quite frankly, what we'redoing with the copenhagen consensus is a broader thing. it's essentially totalk about how do you

spend money to do the most good? where do you get thebiggest bang for your buck? so we actually wrotea book late last year, called "how to spend $75 billionto make the world a better place." if you want a copy, i'm sorry,i just flew in from china. so i'm not carryinga lot of copies. but if you want one,send an email to pam and we'll sendyou a pdf version.

people said i shouldhave written the book "how to make $75billion," but that's a totally differentsort of book. but this is essentially the kindof-- if you were bill gates. we actually do this withhigh school students. we call it "billgates for a day." if you had $75 billion dollars,how would you spend it? it turns out thatit's important to say you can't spend it on yourself?

but the idea here isthen to say, where do you get the biggestbang for the buck? and their sort ofinitial response is i can fix all problems. they think $75 billionis a lot of money. and then, of course,they realize, no, while it's alot of money, it's actually not enoughto fix all problems. and then they reallywant to find out

how do i spend it inthe best possible way? and that's the conversation thati want to get you involved in. we have about an hour. and i actually want youto help me prioritize. so i brought some strips. i'll distribute themin just a little bit. but to think about how dowe prioritize big issues? so if you'll just allowme-- just let's remember, there are lots and lotsof problems in this world.

and if we talkabout some of them. and we probablyshould be talking about a lot more of them. there's about abillion people that don't have clean drinking water. pretty much everyonein the world would be better off ifwe didn't have subsidies, especially foragricultural products. one of the thingswe rarely talk about

is every year, two newcivil wars, typically in places you haven'teven heard of. and very often theyget very little or no attention inthe global press. they cost about $60billion per civil war. not mostly, as you'd imagine,because people get killed. yes, they do get killed. but because it disruptstheir economies. and that essentially means thatpeople lose a lot of income.

and that actually meansthat they and their babies get a lot less health care. and that's what really killsmost people in civil wars. it's not the actual conflict. but it's the fact ofthe fallout of all of the economicdownturn in these areas. likewise, about3.5 million people die each year fromindoor air pollution. and the world healthorganization actually

just upped that three weeks ago,saying it's 4.3 million people. so about one in 12 peoplethat die on this planet, die because ofindoor air pollution. basically, lots of poorpeople, about 3 billion people, cooking and keepingwarm with open fires. and 20% of all deathsin developing countries are due to easily curableinfectious diseases. the list goes on. my point here issimply to say there

are lots and lots of problems. what should we do withsay the next $75 billion? so we're not talkingabout recasting the entire universe of spending. that would be funto think about, but it's not going to happen. and also, our models would notbe very good at handling it, if we sort of wanted tomake a radical break. instead, we're talking abouthow would you marginally change

the world? and $75 billion isactually a marginal change over four years. it's about 10% to 15%of what the world spends on overseas development aid. it's a lot less thanwhat the world spends on climate policies. so essentially, we'resaying take a small chunk or imagine a smallextra chunk and say

how would you spend that? where would youdo the most good? so this is for corporatesocial responsibility, for philanthropy, forgovernment spending. right now, our focusseems to be directed by who has themost cute animals, or who have themost crying babies, or who had thegreatest pr groups. and why that's veryunderstandable,

it's probably not the bestway to deal with this issue. i would argue that alot of organizations who have tried to garnerattention to all their worthy subjects, tend tofocus on sort of panic. there's an issue here. we need to fix it. you need to give us money. and you sort oframp up the message. it makes for good pr.

but it doesn't makefor very good policy. so i would arguewe can do better. and what we are tryingto do is essentially say, well, what's themost cost-effective way to deal with a lotof these issues? that's, of course, alittle more boring. it's not as sexy. but it just happensto do a lot more good. so really what we tried todo is to set priorities.

but setting priorities-- i meanin principle, everybody agrees. yes, we should do the thingsthat will do the most good. but in reality, ofcourse, that also means when you saythis should come first, this should comesecond, it also means you have to say somethingshould come last. and, of course, thatalways annoys people. so saying a prioritizationis important also mean saying whatshouldn't come first.

and that inevitably meansyou end up annoying people. so the people that we typicallyhave at the top of our list think our organizationis the greatest thing since sliced bread andthink this is wonderful. and they constantly mention it. and, of course, the peoplewho advocate the things at the bottom willjust say we're stupid, and you shouldn't listen tous, and all that kind of stuff. it's very obvious.

but it also engendersa lot of controversy. but at the end of the day, ithink we need to ask ourselves where can we do the most good? and that's really what i wantto talk to you about and have you try and help us with doing. so these are the 10 challengeswe looked at last year. we do this every four years. so we did the last one in 2012,where we get about a hundred of the world's topeconomists to look across

all these different areas. we have lots of teams. i'll talk a little bitmore about the process. but fundamentally,these are the issues that we looked at, armedcomplex, biodiversity, chronic disease, climatechange, education, hunger and malnutrition, infectiousdiseases, natural disasters, population growth, andwater and sanitation. i think most people would acceptthat, yes, this is definitely

a very comprehensive listof the world's big problems. you can always imaginationthere should be one more. we also got to prioritize. so we've sort of said we'reonly going to look at 10. but these aredefinitely big issues. a typical sort ofjournalist question is then to say, well, so,of these big problems, which problem is the biggest? it's sort of a verynatural question?

it also turns out to be wrong. it's not a well-formed question. you can't ask what's thebiggest problem without knowing that there's a solution. i mean arguably the biggestproblem in the world is that we all die. but we don't have agood solution to that. and economists would say wehave a severe undersupply of immortality.

but we don't quiteknow how to fix that. so the issue here is not tosay what's the biggest problem? we need to look at whatare the smartest solutions? so if you look at armedconflicts, for instance, you could go in and say shouldwe do conflict prevention? should we have peacekeepingforces for the un? what are the solutions? and then what we triedto do is to say, well, how much with thatsolution cost,

and what's the likelihoodthat it will work, and how much good wouldthat solution then do? so we're basically sayinghow much money would you spend, how much goodwould you end up doing? likewise for biodiversity, maybewe should protect more areas. right now, we haveprotected about 12% of the earth's surface. maybe we should protect more. how much will that cost?

how much good will it do? obviously, it won'tmostly be measured in lives saved because it'snot really about human lives. but it's about thefact that we all like the idea that there willbe more biodiversity preserved for future generations. likewise with chronicdisease, maybe we should have a tobacco tax. one fun fact is thatin the 20th century,

we estimated about 100 millionpeople died from tobacco. in the 21st century-- mostlybecause china and india are smoking like crazy--we are actually estimating on currenttrends, we will lose about a billionpeople to tobacco. so maybe we should dosomething about that. maybe we should havea heart attack pill. so these are very cheap. we know how to deal withthem in developed countries.

as developing countriesare increasingly avoiding infectiousdiseases, maybe we should start gettingmore heart attack pills. a lot of people die from a heartattack in the developing world. and on and on, thereare lots and lots of solutions forall of these areas. it makes it more complicated. but it also makes a lot moreinteresting because we're not talking about is a problem, abig problem or a small problem?

but we're talkingabout are there good solutions or bad solutions? and typically, there areboth good and bad solutions to pretty much all of these. so it's about findingthe good solutions to the big problemsin the world. and that's really what iwant to get you involved in. so let me just talk a littlebit about how we do this. we team up with some ofthe world's top economists.

for instance, on theinfectious disease, we worked with deanjamison, who has basically written the manual for theworld health organization, about 305 diseases inthe world and what their cost and benefits are. he has a team ofeconomists behind him. so he goes in and looks at alot of different solutions. i'm just going tolook at three of them. and again, i'm just going todo them very, very quickly.

he looks at tuberculosis,hiv vaccine, and malaria. but he doesn't justsay, this is important. he says, for every dollaryou spend on tuberculosis on the dots approach, whichis basically getting people medicine, but makingsure they keep taking it. i don't know ifyou've ever-- i mean it's a problem in many places. but if you get medicine fromyour doctor, once you get good, it's hard to remember tokeep taking the medicine far

out-- a long time afteryou've gotten gone well again. and that's the problemwas with tuberculosis. you actually need totake your medication for a very long time. you also need to make surethat you're actually cured. that it wasn't a variantthat was actually resistant to themedicine you got. so with all that, and withthe smartest approaches, they estimate that for everydollar spent in tuberculosis,

you will do about$15 worth of good. that's pretty fantastic. on hiv vaccine, theyestimate-- and this was the first cost/benefitfor hiv vaccine ever done-- they estimate that forevery dollar spent, you will do about$11 worth of good. for malaria, $1 willdo $35 worth of good. suddenly you get avery different approach to understanding theseare not just good things,

but some of them arephenomenal things. of course, we also need tohave a conversation about what went into those numbers. do we believe those numbers? when you ask an academic,they'll come up with answers. but obviously, they'renot the true answer. so we actually asked two othergroups of academics, also economists, to giveperspectives on this. and basically, hetells you, yeah,

but= their modeloverestimates this, the cost is underestimatedhere, all these kinds of things. so we actually hear a broadsort of range of conversations on what will workand what won't. then we do this for allthe different panels. and then we havean expert panel. last time, we hadfour nobel laureates. we're listening toall of these guys, listening to all the arguments,and then basically prioritizing

across all thesedifferent areas. and that's essentially what i'dlike to have you do here today. i have physical stripsfor you here in the room. the ones who are followingon the internet, i'm sorry, you'll have to makeup your own strips. but basically, i want to giveyou the exact same technology that we have with the nobels. here, if you couldjust distribute this. and these were actuallycut in beijing.

i just gave a talk at thepeking university there. so essentially, ijust have these. and i was told that we onlyhave about 45 minutes because we wanted to havequestions and answers. so i'm actually going to cutout one of these solutions because it takes a longtime to explain it. so we'll just be usingsix of these solutions. and i basically just want youto help prioritize these issues. so if we can just takea look at some of these.

again, this was the list of thesolutions that i showed you. i'd love to go throughall of them with you. but again, we havea very limited time. so i just want to giveyou the gist of this idea and just take a look atthree of the problems. so let's just takea look at three of the challenges,climate change, education, and hunger and malnutrition. i've taken them because i'msure this is some of things that

would interest you, andthat would be exciting, and that will also make forsort of a good comparison. but obviously, wecould have looked at lot of different things. and essentially, of course,you should look at everything. if you really had $75 billion,you probably wouldn't just want this room to sit for anhour and then we'll decide were exactly to spend it. but it's the ideathat i'm hoping.

so let me start off withhunger and malnutrition. so if i could ask youto take the first two strips that you have up here. the first twostrips are basically for hunger and malnutrition. so just simply tearoff the first two ones. and then tear eachone of them up. so you have these two strips. and basically whati want you to do

is when we talk about thesefirst two solutions, decide which of these two would youfirst fund if you had money? would you fund this beforeyou fund this or the other way around? so it's reallyvery, very simple. of course, we're goingto put in more and more and eventually end upwith a ranking of all six. so hunger and malnutrition,it's a big problem. there's about a billion peoplethat go to bed hungry each day.

it's almost inconceivable. about one in sevenpeople on this planet go to bed hungry each day. it's not becausethere's not enough food. it's mostly becausethey're poor. they can't afford toactually buy the food. the number has remainedpretty constant over the last 40 years. because there's a lotmore people in the world,

the prevalence has dropped from34% in 1970 to about 18% today. a large part ofthis is, of course, because of two different things. we've had a lack of innovationsince the first green revolution that wehave around 1970. how many have heardof norman borlaug? norman borlaug won the nobelprize and the peace prize in 1970 for essentiallyinstigating-- starting-- instigating--the first green revolution,

basically providing much moreoutput for every plot of land. with dwarf varieties,with higher inputs especially of fertilizer,we could dramatically increase the yieldsof most basic crops. and it's estimatedthat he probably saved somewhere between1 and 2 billion people. now, that's prettycool to put in your cv. but since then, we'vebasically been complacent. so we haven't done very much.

so we haven't been focusingon keeping and getting more and more out ofevery plot of land. and of course, also, we'renow planting lots of crop with biofuels. so essentially in the us,you're using about 40% of the corn yield inthe us to produce fuel. which in some fundamentalsense is morally wrong, right? i mean you're actuallyusing about 5% of the world's caloriesthat we produce

to produce into fuel, insteadof helping feeding the world. of course, itdoesn't directly go to helping feeding the world. but it increasesthe price, which makes it harder forpoor people to buy. so these are some of theproblems that we have to face. but again, what we asked theexperts was then basically, well, how do you fix that? how do you go about doing that?

they had lots ofdifferent solutions. again, i'm just goingto look at two of them. one is to research anddevelopment and increase yield enhancement to essentially geta second green revolution going. and the other one is reducechronic undernutrition in preschoolers. sort of a more standardkind of approach. let's just make sure that kids,especially very young kids, are fed well.

but there are also lotsand lots of other things. and you can read all the papers. so either in the "how to spend$75 billion" or on online. in copenhagenconsensus.com,there's all the papers available. they look, for instance, oncrop advisory text messages. the idea that yousend out to farmers in third-world countries,you should plant this because this is actuallygoing to be good this year.

you should plant itnow because we estimate that this is going to bethe best time to plant it. you should harvest now. you should sell ithere because that's where you're going toget the most money. i thought this was goingto be a phenomenal idea. it turns out it'snot all that great. it probably gives you a coupledollars back on the dollar. so it's a nice thing, butnot all that terrific.

but there are lots ofother opportunities. i'm just going to look attwo of these solutions. so let's talk about thefirst one, increase yield through r&d. it's somethingwe know very well how to do. we are doing someof this, mostly for first-world countries. we're spending about$5 billion per year and probably likely tokeep doing that until 2050. so that's sort of the standardmodel, if we don't do anything.

and then what theresearchers did was say, imagine ifwe spend $8 billion more on research and developmentinto agricultural yield enhancement every year? so we get up to $13 billionper year, up till 2050? because we've donethis a lot, we have a pretty good understandingof what that would actually mean. it would probablyincrease growth rates

for crop yields of about 0.4percentage points and livestock yields by about 0.2percentage points. so not very much. but because it's going to beaccumulated over almost half a century, it's actuallygoing to have a huge impact. not so much in gdp becauseagriculture makes up a smaller andsmaller part of gdp. so yes, it would increasegdp a little bit. but it's not reallywhat matters.

what would mattera lot more is it would lower food prices,which of course is incredibly important for poor people. and it would reducethe number of hungry. remember, it wouldn'teradicate the number of hungry and that's one ofthe crucial points. of all of the thingswe're talking about, we're not solving problems. we're making them smaller.

we're reducing it. because if you weresolving it, if you're fixing the last guy who'shungry-- don't go hungry. of course, that wouldbe really, really nice. but that's probably going tobe phenomenally expensive. and you could do somethingelse with that money and do much more good elsewhere. so the idea is we'rereducing the problem, but we're not solving it.

and the cost again--i'm just going to do the very simplecost and benefit. the process is justbasically the discounted cost of $8 billion dollars overthe next half century. so it's about $184 billion. we actually use twodifferent discount rates. that will becomeeven more important when we talk about educationand climate change. but basically, i'mjust going to give you

one number becauseotherwise this just becomes way, way too complicated. but essentially, youcan adjust in that. we also have a discussion,when you ask the questions, about whether this shouldbe higher or lower? so the cost is fairly simple. we've just been spending$8 billion a year more. the benefits, if youjust look at what's the benefit to consumers andalso to producers-- well,

producers actually lose becausethe prices are going to drop. but because we're all consumersand we'll gain a lot more, the overall benefit issignificant to the world. the economists estimate it'sabout $3 and 1/2 trillion. so on that very, very simplebasis, a little bit depending on your discountrate, it's simply dividing those twonumbers with each other. and you get a benefit/costratio of somewhere between $16 and $21.

so basically for every dollaryou spend on extra research and development, you dosomewhere between $16 and $21 of good in the world. now, that's a verysimple assumption. but, of course, it's alsoa very, very tiny part of the benefits. there are a numberof other benefits that we need to calculateinto this number. yes, we get cheaper foods.

that's great. but it also isvery, very important that through researchand development, we can also makevariability lower. that's important becausevariability is really what kills most people. remember, it's not the factthat you can't afford food most of the time. it's the fact that every oncein awhile there's a huge drought

and then prices spikes, andthen you can't afford it, and then you die. and then, of course,it's no real help that help that pricesdrop next year. so the idea here is if we couldhave drought-resistant species, if we could havesaline-resistant species, if we could focus more on thesethings-- which of course will also help address, forinstance, climate change, or the impact of climatechange, we will actually

make sure a lot morepeople will survive, to also be able tobuy next year, when the prices drop down again. the experts did this estimate. it's the first cost/benefitfor variability. they had very, verylarge estimates. but the nobels didn'tactually believe that. it would probably have somebenefit, but not nearly as much as what they'd like.

they talked aboutin the high $50s. it's more likely that thebenefit/cost ratio, including the one i mentioned up above, issomewhere between $20 and $25. so it makes it an evenbetter investment. but it's not, again, phenomenal. but there are two morethings we need to remember. if you spend more money onresearch and development so that you gethigher yields, it also means we have to chopdown less forests.

so that will help biodiversity. basically as we getmore and more people, we can either grow more foodon the same amount of land or we'll have to cutdown nature in order to be able to feed morepeople on more land. the more we can do itthrough yield increases, the less we have tochop down extra land. so that actually meanswe'll save forests. if we estimate howmuch people are

willing to spend onmaking sure that we get more biodiversity-- so firstworld is typically wanting to do good for biodiversity--we can actually come out with about atrillion or not or so more in ecosystem benefits. you have a question? i've been told that youshould use a microphone. audience: sure. thanks.

yeah. it seems to me that typicallythe way we increase yields is by channeling the crops intomore and more of a monoculture, which reduces thediversity in the crops. which means that when anew threat comes along, the yield is more vulnerablethan it was before. so how does that fit with yournotion of reduced variability in a situation where,say, all of a sudden we have a plague of anew variety of locust?

bjorn lomborg: it'sa very good question. it's not modeled. and i'm not sure howexactly we would model it. we've certainly seen incommercial agriculture that we have been able tohandle the threats that have been so far. but that, of course, is noguarantee for the next risk. one of the ways thatwe could do that-- and that's notincluded in this--

is having more of a gene bank. i mean we already do have that. and that turned outto be incredibly important for the wheat rust andmany of the other big threats that we have toagriculture in the past. but i don't know. so the answer is it'sprobably not a good way to try and go-- to have lessmonoculture in that sense-- that you have even lower yields.

that will probably end upmaking you much, much more risky every year. but you do needsome way of thinking about how you're going to sortof avoid these big challenges. and the way i see it,again, a gene bank is probably oneof the best ways. gmos, so geneticmodification, may also be one of the answers to that. but again, it's not included.

and so yourdecision, if you find that that's a crucialpoint to this, is actually then to say then,i think this is less good. because i don't actuallybelieve that this is going to haveas many benefits. the benefits are overestimatedbecause it has not taken into account that there'sa potential huge crash waiting around the corner in 20 years. and it's, again, oneof those questions

that i'm just a poorrepresentative of the guys who have actually done the studies. you should ask one of them. and then, they mayhave a better answer. but i don't knowthe answer to that. again, one of the pointswe have to remember is we're sort of pushing allof the academics in pretty much all of their areas here. and this is the best knowledgei would argue that we have.

but it doesn't mean byany means this is perfect. i would love for everybody tohave good models of everything and we don't. climate change is actually,curiously enough, one of the places where wehave the best models because we have alsospent a lot of money. and they've kindof known that they have to build models fora lot of different things. but most of these-- forinstance, agricultural models--

have very, very fewvariables in them. and so we push them to do more. but we haven'tput in everything. so it also helpstackling global warming. if you don't cutdown forests, you don't release the co2into the atmosphere. and they actually estimatethat keeping those trees has another billion-- sorry,another trillion in value, or thereabouts.

so the totalbenefit/cost ratio is estimated to bearound $30 to $40. so for every dollar spent, youdo $30 to $40 worth of good. that's a phenomenal impact. but that's just oneof the proposals. so let me just showyou the other one. it's a much morestraightforward. because remember,this is basically a promise in the future.

the other one is avery, very simple one. it's basically just getmore food to kids now. there's about 180 millionkids that are undernourished, preschoolers thatare undernourished. let's try and help them. this is a list of all thethings that we can give them and the price tags for each kid. so all in all, thatadds up to about $96 to basically make surethat they don't get

malnourished in thefirst two life years. so up till they'retwo years old. it's very, very simple. we know how to do this. this is also includingthe distribution cost. so it's a very simple thing. we've tried it a lot. we know this works. the question isnot really how much

it would costbecause we know that. if we tried to saveabout 31 million kids each year in a cohort, it'llcost us about $3 billion a year. and the benefits aregoing to be significant. i've actually arguedthis for quite a while. but we got good dataabout a year and a half ago, that i just briefly want totell you about, from guatemala. we've had good, sort oftheoretical arguments

but there was a studydone that started in the late '60s in guatemala. where american researchers wentdown, found two small villages in guatemala, and gave thekids in those villages, who were pretty malnourished,gave them good food. then they foundtwo other villages close by that wereidentical in all parameters and didn't give them good food. they essentially gavethem sugar water instead.

it was the '60s. you could get away with that. but the fundamentalpoint, of course, is this is a phenomenal study. they've now gone back andrefound almost of them. they found about 79%of them, so 3,500 kids that were both in the controlgroup and the actual study group. and the impact was phenomenal.

they had better marriages. they have better jobs. they had stayedlonger in school. they had learnt more. basically, their brains andtheir muscles had developed. they had better jobs. they had fewer kids. if they were women,there had miscarriages. but crucially, if theyavoided being stunted,

they had three times the pay. so they were phenomenallymore productive. because they hadlearnt more in school, they were more valuable. they started this virtual circleof actually helping their kids and becoming more productive. now, we also have studies fromabout four other countries. we have big studies,but not quite as long. so two in africa and bangladesh.

and the net impactof this is estimated that if you canavoid stunting, which is a good indicatorof malnutrition, you will get aboutthree times the pay. we can avoid about athird of all stunting in these 31 millionkids per year. and so we actually estimatethat for every dollar spent, on average-- we're not goingto help all of these kids-- but on average,we're going to be

$59 worth of good, whichis a phenomenal impact. so again, the ideahere is simply to say-- and again,remember this only mentions or investigates what'sthe benefit from schooling in the sense that youhave a higher income. that's a very, veryone-dimensional economic input/ and one of things you couldcertainly say is there's also some intrinsic benefitin not starving. so there's a lot ofdifferent, other things

you could pile into this. but one of the problemswe have with economists is that once theyhave a big number, they feel like wedon't really need to make it even bigger byputting in other stuff. but, of course,if you're actually going to compare it toall the other stuff, you actually do need to startthinking about all this. so basically what i'dlike you to do now

is to say you have thesefirst two possibilities. if you were goingto spend your money, how would you prioritize it? could i ask you to talkto the person next to you and basically try toconvince him or her why he or she is wrong andwhy they should prioritize it the other way around? [interposing voices] bjorn lomborg: again,one of the things i hope

becomes kind of obviousis that this suddenly starts a conversation where youcan have a lot more discussions about, well, i actuallythink you get more input or i think you could have lessinput on this sort of thing if we had more time. our nobels and abouta hundred experts spent about twoyears doing this. so in some sense,it's ridiculous that we're just doing an hour.

so please don't take thisas sort of the full process. but it should besort of an input. so hopefully, younow have something where you feel somewhatconfident that one of your proposals isbetter than the other. so let's move onand say, well, there are other problems in the world. so if you take thenext three issues, which are globalwarming-- and i'm actually

going to leave out thegeoengineering simply because it justtakes too much time. and we have a shortamount of time. so i'd love to talk,if somebody wants to talk about it, afterwards. so we're just going to look atthe first two of these strips and basically talk about, well,how do we then prioritize this? because that's obviouslyalso a problem. and let's talk about whatare the solutions here

and how can we deal with it? yes, co2 heats up the planet. it's a significanttemperature increase. it risks millionsof people going hungry, billionswith water stress, millions with coastalflooding, more malaria. there's lots of these risks. there's two points thatwe need to remember. if we look at it froman economic angle,

global warming will probablybe beneficial for high latitude countries, which aretypically rich countries. i come from denmark,a little warming there might not be all that bad. but if you live in low latitudecountries, which are typically poor countries, globalwarming is already bad and will only get worse. so actually the netimpact is probably going to be-- ineconomic terms--

first around thesecond half of century, it's going to turninto a problem. so we're talking abouta long-term problem, not a short-term problem. the second partis no matter what you do with globalwarming, it's only going to impact in thesecond half of the century. so even if we cutdramatically now, because of thelag in the system,

it's really only going tohappen in the second half of this century. so this is not obviouslytechnically true. but it will havevery little impact before the middleof the century. so we're talking aboutimpacts now-- sorry, changes now, that willhave long-term impacts on the negative outcomestowards the end of the century. so again, we had lots ofdifferent people looking

at this. there's actuallysix papers looking at adaptation and alot of other things. i'm not going totalk about these. i'm just going totalk about two things. the carbon tax willreach the 2 degree limit, which is presumably whatall political leaders have signed up to. we are obviously not anywherenear to actually doing

that in real policies. but we look at whatwould that take. and then also theother solution, make green energy cheaperthrough innovation. but as you can see,there's lots and lots of other opportunities,geoengineering, adaptation, carbon taxes, lots of otherthings, deal with methane, black soot, technology transfer,forests, so on and so forth. so again, i'm just going tolook at two of these solutions

and get a sense ofwhat could we do? if we did want toget a 2-degree limit, the researchers ran this on allthe major macroeconomic climate energy models. they're all collated underthe stanford energy modeling forum, which is considered tobe the gold standard of energy modeling in the world. there are 11 models there. actually, six of the models saywe can't do the 2-degree limit.

we're just way too far ahead. there's no way you can plausiblydo this within the model. so the researchers justlooked at the five models that say it can be done. so in some sense,we're already looking at the optimistic models. remember, obama, merkel,pretty much-- cameron-- pretty much anyleader in the world have at least in principlesigned up to these targets.

but we're not doing anythingclose to doing that. if we were to doit, and if we're going to do in themost effective way, we'd have to raise carbontaxes significantly now, dramatically towards the endof the century, essentially outlawing fossil fuels or atleast the emissions of co2 from fossil fuels. that is equivalent, just toget a sense of proportion, to have a $0.60 per gallonof gasoline carbon tax now

and have about $25 pergallon gasoline by the end of the century. i think you sort of can see thatmight be a hard political task to do in the us. it's also, perhaps,important to recognize that a lot of countries couldactually not afford to do this. we're assuming thatyou'd switched taxation towards carbon fuels andaway from other places. so you'd still havethe same taxation.

but actually, thereare many countries that don't have enough taxationto actually achieve that. so you'd have a net tax increasein these countries, which will probably alsobe problematic. but even if you couldactually do it-- and again, remember this is theeconomically most efficient way to do it-- this wouldreduce temperature increases significantly from 3.5to 2 degrees by design. and it would have avery significant cost.

this is also what the un cameout and said about a month and a half ago. the cost is in theorder of 13% of gdp by the end of the century. so about $40,000billion per year, mostly in lost gdp growth. so that's a significant cost. there would also be significantbenefits, but obviously in a much lower scale.

we estimate the benefits wouldbe in the order of $2 trillion per year, so $2,000billion per year. also the benefit comemuch later than the cost. the cost will occurimmediately and ramp up. whereas the benefits will comemuch later and also ramp up. so if you do the cost-- andthis is actually done out for 300 years-- but it getspretty much the same outcome-- the benefit/costratio is about $0.02. so for every dollarspent, you avoid

about $0.02 of climate damageor you do $0.02 worth of good. that's one of thereasons why i've been arguing that dealing withclimate change in this way is actually nota very smart way. of course, thisupsets some people. but i think at least there'squite a bit of margin to be wrong and stillsort of get the sign right that this is probablynot a beneficial way to tackle global warming.

there is an other way. and that's thefundamental way of looking at making green energy cheaper. if we could make greenenergy much cheaper through innovation-- sobasically get breakthrough technologies-- wecould potentially, for much less money, get muchmore reduction in the co2. essentially, of course, ifwe could get green energy to be so cheap that it wascheaper than fossil fuels,

everyone would switch and we'dbe done talking about this. people would just simply switch. and we wouldn't be needingto talk about global warming anymore. so this would tackle globalwarming in the long run, but obviously notin the short run. the argument here is to saythat we should probably get up on the order of a magnitudeof $100 billion per year, which is obviouslymuch more than what

we are talking about here. but they believe that thisis scalable, certainly in the short and medium term. so we could decide tospend a significant portion of our $75 billion on this. and we'd probably get aboutthe same benefit/cost ratio. and so because we have estimatesfrom a lot of other investment in research anddevelopment, we're talking about new technology.

so obviously, we don't knowwhat is going to come out of it. but the estimateis that this would give a benefit/costratio of about $11. so because we wouldbe spending money now to making sure that wehad better technologies to reduce co2 morein the future, we would actually see lessglobal warming in the long run because peoplewould switch more. remember, this is totally afuture dependent argument.

it may not happen. but there's a good chancethat it would happen. and essentially if youspend it, for instance, on a thousanddifferent technologies, you don't need allthousand to come through. you'd basically just needone of them to come through. and because research is so muchcheaper that actual production, you can afford to spendit on say a thousand different technologies.

and again, we justneed one of them to come out, toactually become cheaper. and that's the onethat will solve it. just to give youone example of this, the us fracking,which obviously is not a green solution in thesense that it has solved global warming, but frackinghas made gas much cheaper in the us. so the us has historically,totally precedentedly,

shifted from producingelectricity with coal, to producingelectricity with gas. you've switched aboutseven percentage points. that has cost to cut carbonemissions so much that we estimate it's about 300megatons per year in total. and obviously, there's alsobeen an economic recession and you've also have more wind. but if you take that out, it'sprobably about 300 megatons. if you look at what the totalcost reduction from all solar

and wind in the world,that's estimated to be about 275 megatons. so sort inadvertently,the us has actually reduced more co2emissions through fracking than all of theworld's wind and solar. and, of course,you make money off of cutting co2 with fracking. basically because you saveabout $100 billion per year from fracking, whereassolar panels probably cost

the world-- the internationalenergy agency estimate it's about $60 billionin subsidies per year. so the simple point is thatonly happened because the doe and others subsidized theinnovation of fracking in the '70s, '80s, and '90s,when nobody could make money off of it. and, of course, thatpoint was not to be green. it was not at all. and it's not either a greensolution in the long run.

but it could be a bridgesolution in the sense that it brings us tolower carbon emissions. and then eventually,of course, we need to move to othertechnologies that will actually totally reduce carbon emissions. remember, fossil fuels areincredibly good for really, really many-- we tend tothink of it as really evil. but imagine yourworld without energy, that's a terrible world.

matt bridley has afun sort of story about why is it funto be louis xiv, or why was it funto be louis xiv? he had 60 people just preparedinner for him every night. and he had a thousandsof the servants helping. that's really,really cool if you're louis xiv, but notvery cool if you're one of a thousand people. it's a veryunsustainable solution.

most people can't be theking and a lot of people end up being servants. but what essentially fossilfuels, or the availability of cheap energy,has allowed us is that we all have lotsand lots of servants. remember, lebergott,another american economist, said the washing machinein 1900 was essentially the american housewife. but now she doesn'tdo that anymore

because we actuallyhave a washing machine. and you have a vacuum. and you have lots ofother technologies. so if you look atit energy-wise, the average european haveabout 150 manpower, 24/7, at our disposal, throughour energy usage. so we have 150 servants,the us has about 300, and india has about 15. so it's a solution tothe very basic problem

that you have lotsof opportunity to do stuff that youcouldn't otherwise do. and that people are willingto spend a lot of money on. so you really have to ramp upthe carbon tax very, very high if you want people toessentially shut it off. now, of course, a low carbontax will shut off a little bit. you'll sort ofcut at the margin. but you won't do very muchof it because you actually really like your fossil fuel.

and so you have toramp it up really high. audience: it just occurswhy you didn't start high? bjorn lomborg: oh, ok, yes. sorry. why do we need to ramp it up? well, fundamentally, becauseevery economist would say, you want to givepeople time to not-- if you had a really, reallyhigh carbon tax right now, it would actually onlyhelp a little bit more

because you'd cutlike 20 more years. but it would have hugecost because you've just build this power plant andnow you have to shut it down, instead of letting it run for 20years, and then when it's old, shutting it down. so it's essentially anefficiency argument, that anything you do,you want to ramp it in so you also get theinnovation opportunity and you get the replacementopportunity in there.

so if i could ask you howwould you prioritize these four interventions andsaying you can only spend a limited amount of money? do they go in between thesolutions you have already? do they go up on topor down the bottom? so if you just spend 30seconds talking to the person next to you againon how you going to rank these fouropportunities? because you can't spendyour money on of it.

so where would youspend your money first? bjorn lomborg: i'm sorryfor rushing you along. but let me justtake the last bit and talk about one moreissue, namely education. so these are thelast two strips. so basically, i just want youto tear up those two again and see where do they fit intothe grand scheme of things. where would you spend your moneyif you only have $75 billion and wanted to do the most good?

so if you look at education,the fundamental good news about education is we'vegot most kids into school. in 1960, 41% of allkids were not in school. and today, it's only about10% that are in not school. and these are almostall of failed states. so fundamentally, we'vegot most kids into school. the problem is, of course, thatmost of these schools suck, and for a lot ofdifferent reasons. a lot of this isincentive structure.

the problem reallyis improving quality. and that's also theconversation in the us. it's actually theconversation everywhere. i don't know if you know thepisa study from oecd, where basically you see whichcountries are best. shanghai always comeout on top, but that's because they self-selectthese schools. so they're probably notreally representative. surprisingly, ittypically turns out

that finland is the bestschooling country in the world. and we have some ideas. but it's also a little hard tounderstand exactly why is that? and so the problem is we reallydon't how to deal with quality. we don't know how tomake quality better. one of the obvious wayswould be to say, well, let's pay teachers-- let's keep goodteachers and fire bad teachers. it turns out that that'sactually both very, very hard to do, as you'vediscovered in the us.

but also that it'svery hard to show. there's typicallyvery little difference on an objective scale betweengood and bad teachers. one way you could do that,of course, was to say, well, we're going to pay youaccording to your test results. but we've tried that. and the typical outcomeis that then the teachers teach to the test. or even worse, theycheat on the test.

so it turns out to bereally, really hard to do. so there's one goodsolution-- and that's actually the best solution thatwe have-- is nutrition. that was one welooked at before. surprisingly, nutritiondoesn't do anything about schooling quality. but essentially,because it improves your brain and yourbrain development, you learn more, even ifyou're in a sucky school.

so in some sense, yes,it's not an ideal solution. but it's a pretty good solution. it's a great way to get moreout of being bad schools. but i'm going to show you two. so nutrition is actually whatmost education economists come out and say is probablythe best investment in education because we know it worksand it's sort of a way around not trying todeal with schools. but there are two other ways.

one is conditionalcash transfers. that's the firstsolution that you have. this is essentiallypaying parents to send their kids to school. it's something we know works. it's been very,very well studied, mostly in the latin america. but even bloomberg triedit out in new york. it didn't work allout all that well.

but fundamentally, it works. it's a very simple thing. we also know it increasesattendance significantly, but not dramaticallyby any means. a large part of thebenefit is actually that it improves health. because if you pay--especially to poor parents, especially if you payto women, so the mothers and in the family,they will spend

part of that moneyon the kid's health. now, that's notreally schooling. but it's still good. so it will actually end up,over all, being a good thing. the total benefit/costratio is 5.2. so it's a nice thing. but it's not aphenomenal outcome. mostly because this isstill just on quantity. we're not actually dealingwith the basic problem

of improving quality. we're just simplyimproving quantity. we're getting morekids into schools that pretty much are still bad. and the reason why it's nota better benefit/cost ratio is because we haveto pay all parents. most parents would still havesend their kids to school even if we haven't paid them. so we're basicallypaying every one

to get a littleincrease in attendance. and yes, then we get thebetter health outcomes. actually, about three ofthe five comes from health. so this is mostlyactually a transfer of money to poor families,which is still good. but it's not got all thatmuch to do with education. but one of thingsthat it really shows is we're don't know verywell what works in education. which, of course, is one of thereasons why the west is also

having this huge discussion. you have a discussionabout how are we going to make schools better. we have it in denmark. we have it in mostoecd countries. we don't quite knowhow to do this. so again, mostlyquantity, not quality. the second solutionis what i think is a phenomenallyinteresting one.

but it will haveanother issue that i think is rampant in manyof these conversations. we don't know enough aboutthe solution right now. so this is more sort of agambling solution for you. it's essentially the ideaof an information campaign. most kids thatlive in rural areas have no idea what'sthe value of education. because the onlyeducated person they see is the teacherin this village.

and he or she is typicallynot very well paid. so the informationcampaign is essentially telling rural kidshow much more are you going to make if you getto the urban area, which you probably will, when you growup, if you have a high school education compared to ifyou don't have a high school education? we're not telling themany false information. we're really just telling themwhat is the average pay-off

in your country if you go tothe city and if you have a high school outcomeversus if you don't. so you teach both thekids and their parents about the payoffs. you show them the statistics. basically show themyou're probably going to make two orthree times as much pay if you have your highschool education. it's very cheap, obviously.

information campaignsare very, very cheap. although this is morethan just a pamphlet. it's actually severaltimes during the year, going out and explainingit to the parents, explaining it to the kids. getting them to understandand say, yes, i really want to stay inschool and learn more. but it actually really works. it gets kids to stay in school,and learn more, and actually

graduate at much higher levels. the problem is we don'thave a lot of studies. we actually onlyhave two studies. and they get very,very different results. and that's why i'mshowing you this. this is one of the problemsthat we typically have. we have a great idea. but we just don'thave enough data. so in some sense, thiswill come down to also

what's your gutinstinct on this. from madagascar-- theseare both peer-reviewed, published studies--from madagascar, we had a benefit/costratio of about a thousand. the nobels said wedon't believe this. but i think that'sreally honestly more sort of on a gut level. clearly, they left out someof the significant cost. but they have beenpeer reviewed.

the other one is thedominican republic, which had a much more sortof sensible benefit/cost ratio of about $13, soin between $8 and $19. so the real issuehere is to say we don't know why theseare so different. you'd obviously have to doa lot more of these tests. we will do that. we will know when in fiveor 10 years much better whether this is a good idea.

but if you had to spend moneynext year, in some sense you'd just have tolive with the fact that we only have two studies. and you have to decide doi want to sort of gamble some of my money on thisor do i just play it safe and say it's probably just $13. so at the end of the day,these are not great outcomes. one of things i also wantedto show with using education is essentially that somesolutions are really,

really good and very obvious. and you probably haven'theard about them. other areas, like education,we talk a lot about. but unfortunately, we don'thave very many good solutions. and our approach at thecopenhagen consensus is to say let'snot try and solve stuff we don't know how to solvewhen there's so many things we do know how to solve thatcould do so much more good. so in a sense, this is reallyjust showing you the dilemma

that we constantly end up in. so if i could askyou-- and i know that you have to leavein just a second-- if i could ask you then toprioritize all of these six? and then we're just going tomake a very quick vote on who's going to think these are great. so just talk to the personnext to you for 30 seconds and agree in how you're goingto prioritize all of these six. bjorn lomborg: when wedo this with nobels,

apart from havinglots of more time, we also take allof their rankings and take the medianof this ranking. so essentially, ifyou were this group, you'd have to not just pull upyour thing you want high up. that's not goingto actually work because you need to pullthe median of the room. so you'd have to comeup with good arguments why you're preferred solutionisn't really much better

and get at least half the roomto move in that direction. we don't have that time. so i'm simply just going todo a very, very quick thing. if i could ask you to votefor your top two solutions? and we're not going to countvotes in here because we don't have $75 billionanyway, or do we? no. right. so let's just get a senseof what the room thinks.

but if i could just ask youwho would vote-- so just vote for your twotop priorities. who would vote for r&d toincrease yield enhancements? all right. pretty good outcome. reduce chronic undernutritionin preschoolers? that's pretty much everyone. a high global carbon tax? one-- very, very proud.

increase green r&d? conditional cash transfers? so schooling and informationcampaign on schooling? so it seems-- very,very unofficial counting-- that chronicundernutrition and green energy r&d where the two main outcomes. and again, my pointhere is not so much to say we're not talkingabout exactly how are we going to spend $75billion because we want

to go much more into detailin the conversation about how all these models generateand how do we trust them. but the point is to say thatthis is a phenomenal way to get a lot of people fromvery, very different angles to talk in the same languageof cost effectiveness. i've done this withyoung political leaders from in manydifferent countries, from the extreme leftto the extreme right. and the fun thingis to say they think

they're going to disagree a lot. but suddenly whenyou get down to it, most people reallywant to do good. and then you want to startfinding out what really works. and, of course, therewill still be differences. but a lot of itdisappears when you start talking about what'sactually cost effective. and so one of myhopes is talking more about rationalityand efficiency helps

us get past some of thesesort of ideological hang-ups that we have where webelieve, no, no, i strongly believe this or i stronglyto support that solution. but rather, that we starttalking about, no, no, if we spend the money overhere, we'd do more good. and that is aphenomenal argument. and that's actually--i'm going to the un. i just want to briefly tell youabout this, with just a half a minute.

the un is actuallydoing their next set of sort of goals forthe next 15 years. and this may actually end updirecting about $700 billion to development aid. and right now, there's about140 goals on the table. of course, if youhave 140 priorities, you don't really have any. and so everybody knows thatyou need to cut these down. but it's very, very hard.

and we're actually trying totake this sort of methodology to basically say wheredo you get a lot of bang for your goals and where do youget little bang for your goals? again, there's going to belots of other ideological and political controversies. and people are going tohave different views simply because they come fromdifferent places on the planet. if you don't haveany malaria, you don't think malaria is probablyall that much important

compared to if you have lots ofmalaria in your home country, and on and on. but if we can get thatconversation in there, even if we can onlydo a little good. imagine if we could switchwhich out one bad goal for one good goal? given that we are leveragingabout $700 billion, that could be a lotof billions of dollars we could end up doing good.

so the reality hereis really just-- i hope that's whati can leave you with is-- this sortof process, if we use both in the global issues,but also in our everyday life, ask-- calculate-- what'sthe bang for the buck? where we got the most good? we'll hopefully endup doing more good. and that i think would besomething that is worth applauding, both from left toright of the political spectrum

and something that we couldall get together on doing, so thank you very muchfor playing along. it was greattalking to you guys.