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Raiding development funding for climate

Feb 22,2024 - Last updated at Feb 22,2024

Too many rich-world politicians and climate campaigners forget that much of the world remains mired in poverty and hunger. Yet, rich countries are increasingly replacing their development aid with climate spending. The World Bank, whose primary goal is to help people out of poverty, has now announced it will divert no less than 45 per cent of its funding toward climate change, shifting some $40 billion annually away from poverty and hunger.

It is easy to treat climate as the world’s priority when your life is comfortable. The 16 per cent of the global population who live in those countries do not typically go hungry or watch loved ones die of easily treatable conditions like malaria or tuberculosis. Most are well-educated, and their average incomes are in the league of what was once reserved for royalty.

Much of the rest of the world, however, still struggles. Across poorer countries, five million children die each year before their fifth birthday, and almost a billion people do not get enough to eat. More than two billion have to cook and keep warm with polluting fuels such as dung and wood, shortening their lifespans. Although most young kids now attend school, low educational quality means most children in low- and lower-middle-income countries will remain functionally illiterate.

Poor countries desperately need more access to the cheap and plentiful energy that previously allowed rich nations to develop. The lack of access to energy hampers industrialisation, growth and opportunity. Case in point: In Africa, electricity is so scarce that the total electricity available per person is much less than what a single refrigerator in the rich world uses.

Raiding development funding for climate spending is an abysmal decision. Climate change is real, but the data does not support using scarce development resources to tackle it ahead of poverty-related ills.

Climate activists argue that poverty and climate change are inextricably linked and we should do both. But we actually don’t. And research repeatedly shows that spending on core development priorities helps much more and much faster per dollar spent than putting funds toward climate. That is because real development investments, whether fighting malaria, boosting the health of women and girls, promoting e-learning or increasing agricultural productivity, can dramatically change lives for the better right now and make poorer countries better off in so many ways, including making them more resilient against natural disasters and any additional, climate-related disasters. By contrast, even drastic carbon emission reductions would not deliver noticeably different outcomes for a generation or more. While spending on adaptation to build resilience in poor countries is a slightly more effective use than cutting emissions, both are far inferior to investing in the best development policies.

Climate change is not the end-of-the-world. Indeed, UN climate panel scenarios show that the world will dramatically improve over the century and that, despite panicked campaigning, climate change will merely slow that progress slightly. Last year, the world saw its largest cereal production ever. With incomes and yields continuing to climb, hunger will fall dramatically over the coming decades. Climate change is forecast to merely make that hunger decline a smidgen slower. Likewise, the panel expects global average income to increase 3.5-fold by 2100, absent climate change. Even if we do little against climate, professor William Nordhaus, the only climate economist to win the Nobel Prize, shows that this would merely slow progress slightly, by 2100 incomes would still have risen 3.34 times.

We should tackle climate change smartly through rich country governments making sorely-needed, long-term investments in green energy R&D to innovate low-cost solutions that deliver reliable energy at prices everyone can afford. Much of the poorer world primarily wants to pull people out of poverty and improve their quality of life with cheap and reliable energy. Yet rich countries now refuse to fund anything remotely fossil fuel-related.

This smacks of hypocrisy, because rich countries themselves get almost four-fifths of their energy from fossil fuels, largely because of the unreliability and storage problems of solar and wind energy. Yet they arrogantly castigate poor countries for aspiring to achieve more energy access and suggest the poor should somehow ‘skip ahead’ to intermittent solar and wind, with an unreliability that the rich world does not accept for its own needs.

For most poor countries, climate change ranks far down the priority list of people living in poorer countries. A large survey of leaders in low- and middle-income countries similarly reveals education, employment, peace and health are at the top of their development priorities, with climate coming 12th out of 16 issues.

The poorer half of the world certainly deserves opportunities to better their lives. But as politicians are asking for more money, ostensibly to help the world’s poorest, we should demand it goes to efficient development projects that actually save and transform lives, not to feel-good, inefficient climate programmes.


Bjorn Lomborg is president of the Copenhagen Consensus and visiting fellow at Stanford University’s Hoover Institution. His new book is “Best Things First”, which The Economist named one of the best books of 2023.

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