Powerlines

When The Skeptical Environmentalist was published in 2001, it landed like a meteor in the middle of the environmental debate. Its author, Danish political scientist Bjørn Lomborg, dared to ask uncomfortable questions and insisted on evidence-based answers. Almost a quater of a century on, his central thesis remains the same: the world faces real environmental challenges, but we’re misallocating resources by focusing on the wrong ones—and often exaggerating the problems we claim to be solving.

In this conversation, Lomborg revisits the foundations of his work and the reaction it provoked, offers a clear-eyed assessment of climate policy, and outlines how we might get better outcomes—not by panicking, but by prioritising smart, cost-effective solutions.

We’re spending $27 trillion to get $4.5 trillion back. That’s not climate policy—that’s bad economics.

Lomborg began his environmental journey as a worried idealist. A member of Greenpeace in his youth, he embraced the apocalyptic language that dominated the movement in the 1980s and 90s. But everything changed when he encountered the work of American economist Julian Simon, who argued that many environmental indicators were improving, not deteriorating. Lomborg’s instinct was to prove Simon wrong. Instead, digging into the data with his students, he discovered much of what Simon said was true.

Air pollution, for example, has been in long-term decline in most wealthy nations. London’s air quality, Lomborg notes, has been improving since the 1890s and is now cleaner than at any point since medieval times. The lesson: when societies become wealthier, they invest in fixing problems. And when it comes to air quality—one of the most lethal environmental threats, killing 4–5 million people each year—that investment has saved lives.

Many environmental reports immediately pivot to panic. Why? Because fear sells.

The backlash to his data-driven optimism was fierce. Lomborg found himself vilified by many in the environmental movement. “I thought we were going to have a discussion about numbers,” he said. “But we were having a discussion about feelings.”

He discovered a paradox at the heart of environmental advocacy: many of the people demanding that we “follow the science” weren’t pleased when he quoted the science back to them. Reports from the UN and other global bodies often contain good news buried beneath doomsday headlines—yet it’s the worst-case scenarios that dominate media coverage, fundraising pitches, and public discourse. Fear sells. But it also distorts.

If you really want to save the planet, invest in innovation—not in telling people to be poorer and colder.

Lomborg doesn’t deny the reality of climate change. What he questions is the apocalyptic framing and the policy response. “Climate change is a problem,” he says. “It’s not the end of the world.”

The best economic models, including those from Nobel laureates like William Nordhaus, suggest that unchecked climate change will reduce global GDP by 2–3% by 2100. That’s a real cost, but not an existential threat. Even accounting for that loss, the average person in 2100 will be 450% richer than today—or slightly less, at 435–440%.

So why are we spending trillions as if we were facing an asteroid impact? Lomborg argues that the Paris Climate Accord may represent the largest misallocation of resources in history. A 2023 study by top climate economists found that it would cost $27 trillion annually to deliver $4.5 trillion in benefits—a deeply lopsided equation.

For $31 a year, you can triple a child’s learning. That’s real impact. That’s smart spending.

If the current strategy is flawed, what should we do instead?

First, Lomborg calls for a pivot away from coercion—telling people to be colder, poorer, and less mobile—and toward innovation. Only by developing green energy sources that are cheaper than fossil fuels can we hope to see widespread global adoption, including in countries like China, India, and across Africa.

He invokes the Green Revolution of the 1960s, which solved looming food shortages not by rationing or redistribution, but by technological innovation in agriculture. The same model, he argues, can apply to energy and climate.

Second, he urges governments and NGOs to look beyond climate. The Copenhagen Consensus Center, which Lomborg leads, works with top economists and Nobel laureates to identify the most cost-effective interventions globally. Their conclusion: climate change is just one of many pressing issues—and not the most urgent.

What delivers the greatest return on investment? Programs that fight malaria, tuberculosis, child malnutrition, and poor education. One example: giving children in developing countries access to personalised tablet-based education for just $31 a year can triple their learning outcomes, lifting productivity and earnings for decades. That $31 investment has an estimated long-term value of $2,000—a return that dwarfs most climate spending.

The Paris Agreement may be the biggest misallocation of resources in human history.

Lomborg is particularly scathing about Europe's energy policies. Germany, he says, spent over half a trillion dollars on wind and solar while shutting down its nuclear industry—only to see rising emissions, higher energy prices, and the deindustrialisation of its economy.

The problem isn’t just the intermittency of renewables—it’s the failure to account for it. Solar and wind may appear cheap “when the sun is shining and the wind is blowing,” but when they’re not, they’re infinitely expensive, and fossil fuel backup is still required. “It’s like being told a solar car is cheaper than your petrol car,” Lomborg quips, “but it only works when it’s sunny—you still have to buy both.”

The economic pain caused by these policies, he warns, is fuelling political backlash—seen most clearly in the rise of populist movements across Europe and the resurgence of Donald Trump in the US. “If you scare people and make them poor, they will revolt.”

We told kids the world was ending. It’s not. It’s time to talk them off the ledge.

What animates Lomborg’s work is not ideology, but a commitment to data and economics. He believes passionately in the power of numbers to cut through political noise and identify what actually works. His latest book, Best Things First, showcases 12 smart, underfunded solutions that could transform global development for a fraction of current climate spending.

These include health interventions, education reform, land rights, and even e-procurement systems to reduce corruption. Together, they could save 4.2 million lives a year, lift millions out of poverty, and generate $52 of benefit for every dollar spent. All for $35 billion a year, a rounding error compared to the $2 trillion we now spend annually on climate policy.

Eventually, people vote out governments that make them poor. The climate movement ignores that at its peril.

Is he hopeful that governments are finally waking up?

“Yes, a little,” Lomborg says, though he’s learned to temper his optimism. Policymakers and voters are starting to feel the cost of bad decisions, and eventually, they will demand change—if not for the right reasons, then out of necessity.

His final message is clear: stop doing the stupid stuff, start doing the smart stuff. Focus on innovation, spend wisely, and recognise that our challenges are real—but solvable.

Bjørn Lomborg Director of the Copenhagen Consensus Center

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Before the last election in 2022, I interviewed then-shadow energy minister Chris Bowen on the Today Show. He was selling a simple idea: more renewables mean lower electricity prices. The logic was that wind and solar are the cheapest forms of generation, so flooding the market with them would drive prices down. Labor commissioned modelling that put a dollar value on that claim: residential electricity prices would fall by $275 by 2025.

I questioned that logic.

Wholesale prices are set by the highest-cost generator—not the cheapest. And wind and solar almost never set the price of electricity at times of peak demand because those peaks occur when the sun rises and sets.

Weather-dependent energy leaves massive generation gaps, and whatever fills those gaps drives wholesale electricity prices. You could carpet the nation in wind farms and solar panels, and this will never change.

Weather-dependent systems also require 100 percent backup, massive increases in transmission and distribution, and taxpayer subsidies. And when they generate for free, they destroy the business models of the power sources we actually need to keep the lights on.

The only thing keeping the wholesale price of power down now is black and brown coal. As coal-fired plants retire, electricity prices will spike ever higher, because gas, hydro and batteries are more expensive.

And the weather-dependent system under construction will never function without a fuel source like gas backing it up—because hydro and batteries are storage, not generation. This reality is written into the Australian Energy Market Operator’s transition plan. Of course, if you want a zero-emissions dispatchable fuel source, there’s only one option: nuclear.

That coal is historically the cheapest form of power was acknowledged in Labor’s modelling, which locked in the price of black coal at the equivalent of $80 a metric ton all the way through to 2040.

But black coal is export-quality and linked to international price movements.

Through 2021, the price of black coal soared due to a global energy crunch driven by post-pandemic demand, supply chain disruptions, and China's unofficial ban on Australian coal, which distorted trade flows and tightened global supply.

Anyone with a passing interest in energy should have been well aware the price had doubled between January and August 2021—from $115 to $247. In October, it spiked to $300. That meant the wholesale price of electricity was already on a disturbing upward march long before Labor’s modelling was released.

Come February 2022, Russia invaded Ukraine, and the price of coal and gas spiked even higher. By the time the election was called in April, the price had hit $450 a metric ton—more than five times the figure baked into Labor’s modelling. Before the election in May, it reached $538.

I said in that 2022 interview with Bowen that prices would rise. They did. Bowen insisted prices would fall. They didn’t. And when they didn’t, the Energy Minister claimed government subsidies were proof his plan was working.

The wholesale price of power makes up about 30 percent of your bill—and it will rise as coal plants retire. Transmission costs—around 9 percent of your bill—will rise because widely distributed generation demands more transmission lines. Distribution costs—the poles and wires—will rise too, and that’s another 30 percent of your bill.

The short story is: the system under construction will drive every part of your power bill higher.

We now face another election.

If the Albanese Government is certain that more weather-dependent generation will drive down the cost of electricity, then it should show courage in that conviction. Commit, in this election, that power prices will fall—or, at the very least, stabilise.

I predict they will continue to rise. The only thing that can bring them down is a cheap, abundant source of fossil fuel.

Coal, anyone?

This isn’t a transition—it’s a travesty.

Robert Bryce is a veteran energy journalist with over three decades of experience. Growing up in Tulsa, Oklahoma, an oil-industry hub, Bryce was exposed to energy issues early on. His career began in Texas, where he wrote for the Austin Chronicle for twelve years before contributing to major outlets like The Wall Street Journal and The New York Times. Bryce's mother, a teacher, instilled in him a love for clear communication, which he applies to his energy reporting by breaking down complex topics into simple terms.

Bryce emphasises the importance of making energy issues understandable to the public. He believes in presenting hard facts without spin, using concrete data and real-world examples to explain abstract concepts like power density and grid reliability. His goal is to elevate the energy debate beyond slogans, ensuring that even non-experts can form informed opinions about renewables, fossil fuels, and nuclear power.

Bryce's documentary, "Juice: How Electricity Explains the World," explores the disparity between energy-rich and energy-poor regions. Filming took him across the globe, documenting how over 3 billion people use less electricity than a typical American refrigerator. The documentary highlights the human face of energy poverty, showing how lack of electricity traps communities in hardship. Bryce's experiences reinforced his belief that affordable, plentiful energy is essential for improving living standards worldwide.

Bryce criticises international institutions like the World Bank for restricting financing for fossil-fuel power projects in developing countries. He argues that such policies keep the poor in the dark, as renewable energy alone often cannot provide the reliable electricity needed for modern economies. Bryce calls for a reorientation of international energy efforts to eradicate energy poverty by any pragmatic means.

While acknowledging the growth of wind and solar power, Bryce highlights their limitations, such as low energy density and land use issues. He points out that large-scale deployments can lead to conflicts over land and environmental impacts. Bryce also questions the return on investment for renewables, citing Germany's high electricity prices despite significant spending on wind and solar. He advocates for a balanced approach, using renewables where practical but also investing in high-density, always-on sources like nuclear and natural gas.

Bryce expresses concern that aggressive decarbonisation policies often hurt working-class and low-income people the most. He argues that programs to "electrify everything" can raise the cost of living for ordinary citizens. Bryce calls for energy realism, balancing emissions reduction with keeping energy affordable to avoid exacerbating social inequalities.

Bryce draws lessons from international examples, such as Germany's high electricity prices and reliance on coal after shutting down nuclear plants, the UK's vulnerability to wind droughts, and Australia's high electricity costs due to overinvestment in renewables. He contrasts these with China's focus on growth and reliability, building a mix of coal, gas, hydro, renewables, and nuclear to ensure ample energy for development.

Bryce is a strong proponent of nuclear energy, arguing that it is essential for reducing emissions and lifting billions out of energy poverty. He believes that advanced nuclear designs and streamlined regulations can overcome past opposition and make nuclear a central part of the energy mix.

Bryce critiques the climate change movement for sometimes taking on religious or quasi-religious undertones, treating fossil fuel use as sinful and ignoring trade-offs and human costs. He advocates for energy humanism, focusing on practical steps to improve lives rather than treating lower carbon emissions as the sole end goal.

Bryce highlights how energy poverty disproportionately affects women and girls, trapping them in subsistence roles. Access to electricity can transform their lives, enabling education, employment, and better health. Bryce calls for prioritising energy access to uplift women and girls in developing countries10.

For those interested in learning more, Bryce's work can be found in his books, Substack newsletter, Power Hungry podcast, and the documentary "Juice." He remains active on social media, sharing insights and engaging with the public on energy issues.