The Rational Optimist: How Prosperity Evolves

by Matt Ridley

Botswana

It is consistently the most successful economy in the world in recent decades.

But its biggest advantage is one that the rest of Africa could easily have shared: good institutions.

In particular, Botswana turns out to have secure, enforceable property rights that are fairly widely distributed and fairly well respected.

the reason it had flourished was because its people owned property without fear of confiscation by chiefs or thieves to a much greater extent than in the rest of Africa.

The slums of Nairobi and Lagos are terrible places, but the chief fault lies with governments, which place bureaucratic barriers in the way of entrepreneurs trying to build affordable homes for people.

The Peruvian economist Hernando de Soto estimates that Africans own an astonishing $1 trillion in ‘dead capital’ – savings that cannot be used as collateral because they are invested in ill-documented property.

free up the rules governing business.

Mobile phones not only enable people to get work, but also to pay for and be paid for services – mobile phone credits having become in effect a form of informal banking and payments system.

The key policies for Africa are to abolish Europe’s and America’s farm subsidies, quotas and import tariffs, formalise and simplify the laws that govern business, undermine tyrants and above all encourage the growth of free-trading cities.

I could plunge into the scientific debate and try to persuade you and myself that the competitive clamour of alarm is as exaggerated as it proved to be on eugenics, acid rain, sperm counts and cancer – that the warming the globe faces in the next century is more likely to be mild than catastrophic;

that there were warmer periods in earth’s history in medieval times and about 6,000 years ago yet no accelerations or ‘tipping points’ were reached; and that humanity and nature survived much faster warming lurches in climate during the ice ages than anything predicted for this century.

With a higher discount rate, Stern’s argument collapses because, even in the worst case, harm done by climate change in the twenty-second century is far less costly than harm done by climate-mitigation measures today.

‘How great a sacrifice is it either reasonable or realistic to ask the present generation, particularly the present generation in the developing world, to make, in the hope of avoiding the prospect that the people of the developing world in a hundred years time may not be 9.5 times as well off as they are today, but only 8.5 times?’

If there is a 99 per cent chance that the world’s poor can grow much richer for a century while still emitting carbon dioxide, then who am I to deny them that chance? After all, the richer they get the less weather dependent their economies will be and the more affordable they will find adaptation to climate change.

Warmer and richer or cooler and poorer?

Sea level is by far the most worrisome issue, because the current sea level is indeed the best of all possible sea levels: any change – up or down – will leave ports unusable. The IPCC forecasts that average sea level will rise by about 2–6 millimetres a year, compared with a recent rate of about 3.2 millimetres a year (or about a foot per century).

The Greenland land-based ice cap will melt a bit around the edge – many Greenland glaciers retreated in the last few decades of the twentieth century – but even the highest estimates of Greenland’s melting are that it is currently losing mass at the rate of less than 1 per cent per century. It will be gone by ad 12,000.

As for fresh water, the evidence suggests, remarkably, that, other things being equal, warming will itself reduce the total population at risk from water shortage. Say again? Yes, reduce. On average rainfall will increase in a warmer world because of greater evaporation from the oceans, as it did in previous warm episodes such as the Holocene (when the Arctic ocean may have been almost ice-free in summer), the Egyptian, Roman and medieval warm periods.

In measuring health, note that globally the number of excess deaths during cold weather continues to exceed the number of excess deaths during heat waves by a large margin – by about five to one in most of Europe.

Many commentators seized on the World Health Organisation’s 2002 estimate that 150,000 people were dying each year as a result of climate change. The calculation assumed that an arbitrary 2.4 per cent of diarrhoea deaths were due to extra warmth breeding extra pathogenic bacteria; that some proportion of malaria deaths were due to extra rainfall breeding extra mosquitoes, and so on. But even if you accept these guesses, the WHO’s own figures showed that climate change was dwarfed as a cause of death by iron deficiency, cholesterol, unsafe sex, tobacco, traffic accidents and other things, not to mention ‘ordinary’ diarrhoea and malaria. Even obesity, according to the same report, was killing more than twice as many people as climate change. Nor was any attempt made to estimate the number of lives saved by carbon emissions – by the provision of electric power to a village where people suffer from ill health due to indoor air pollution from cooking over open fires, say, or the deaths from malnutrition prevented by the higher productivity of agriculture using fertiliser made from natural gas.

The global food supply will probably increase if temperature rises by up to 3°C.

Not only will the warmth improve yields from cold lands and the rainfall improve yields from some dry lands, but the increased carbon dioxide will itself enhance yields, especially in dry areas. Wheat, for example, grows 15–40 per cent faster in 600 parts per million of carbon dioxide than it does in 295 ppm. (Glasshouses often use air enriched in carbon dioxide to 1,000 ppm to enhance plant growth rates.) This effect, together with greater rainfall and new techniques, means that less habitat will probably be lost to farming in a warmer world. Indeed under the warmest scenario, much land could revert to wilderness, leaving only 5 per cent of the world under the plough in 2100, compared with 11.6 per cent today, allowing more space for wilderness. The richest and warmest version of the future will have the least hunger, and will have ploughed the least extra land to feed itself

The four horsemen of the human apocalypse, which cause the most premature and avoidable death in poor countries, are and will be for many years the same: hunger, dirty water, indoor smoke and malaria, which kill respectively about seven, three, three and two people per minute. If you want to do your fellow human beings good, spend your effort on combating those so that people can prosper, ready to meet climate challenges as they arrive. Economists estimate that a dollar spent on mitigating climate change brings ninety cents of benefits compared with $20 benefits per dollar spent on healthcare and $16 per dollar spent on hunger.

Conservationists, who have done tremendous good over the past half-century protecting and restoring a few wild ecosystems, and encouraging local people to support and value them, risk being betrayed by the new politicised climate campaigners, whose passion for renewable energy is eating into those very ecosystems and drawing funds away from their efforts.

My general optimism is therefore not dented by the undoubted challenge of global warming by carbon dioxide. Even if the world warms as much as the consensus expects, the net harm still looks small alongside the real harm now being done by preventable causes; and if it does warm this much, it will be because more people are rich enough to afford to do something about it.

In short, a warmer and richer world will be more likely to improve the well-being of both human beings and ecosystems than a cooler but poorer one.

Besides, there is just no sign of most renewables getting cheaper. The cost of wind power has been stuck at three times the cost of coal power for many years.

Although green campaigners are wont to argue that raising the cost of energy is a good thing, by definition it destroys jobs by reducing investment in other sectors.