95. What's Essential: Dr. Bjorn Lomborg on Radical Prioritization

Come with me on an exploration of self-discovery. On this podcast we decipher what really matters. As we unravel the chaos of day-to-day work to learn how to build an essential life. Today I have on the What's Essential Podcast, Beyond Lomburg, I'm loosely speaking, he's a genius. He's a political scientist. He heads the Copenhagen consensus, which has done something really rare. And certainly grabbed my attention the moment I became aware of it. He has gone through a process of prioritizing the world's greatest problems. Global warming, poverty, disease, based on how effective our solutions might be. So there's a lot more that Beyond has done professionally and is educational pursuits, is academic work. But this is the focus of today's conversation. It is with great pleasure that I welcome you to The What's Essential Podcast. Great, it's great to be here. Can you give us some context for setting up the Copenhagen consensus and the process you followed to prioritization? Because this is to me a non-trivial achievement. Let me say by way of a little further context. I have spent a decent amount of time in the world economic form, in Davos, in various venues. I have talked to people who organized the United Nations development goals, whether the millennial goals or the replacement to those. As an essentialist, I've advocated pretty strongly for prioritized lists. And despite all of that, I have, let's say, failed in my efforts. Because when they came out with the replacement millennial development goals, I recall 17 of them not prioritized as any sense. And so it's just a list, and I'm not arguing that they aren't important items, but there's just so many of them. What do you do? And so we're acting as if there aren't trade-offs, and this has ramifications. You took a different approach. Go. Well, thank you, Greg. And I've got to say, we share something very important in common. We clearly both failed to get most people. And you can listen to prioritization. Fundamentally, prioritization is an obvious thing. It's something you do every day. Something you do as a person. You don't have enough time. You don't have enough resources. You have to choose to do some things over other things. It's not that you wouldn't like to do everything. It's simply that you can't. And we do this as organizations. We certainly do this if we run companies. And politicians do this for the countries as well. And we always prioritize. And the trick, of course, is even if we don't talk about prioritization, we end up prioritizing because we can't do everything. So really what I tried to do with the Copenhagen consensus, and the start it back in the early 2000s, was to say, how come we don't have a good sense of where can you spend a dollar and do a lot of good, and where can you spend a dollar and do less good? And basically get a sense of where would you do the most good for every dollar spent? Because if you had that, it would be a lot easier to make good priorities. Now, obviously this is not the only issue that matters. If you know somebody, you're certainly going to prioritize them over people you don't know. You might also like people from your country, rather than from other countries. Most people seem to at least implicitly have that priority. And there are many, many other things you would take into consideration. But at least we should have a conversation about where can we do the most good first? And that's both incredibly important. But at the same time, and that's, of course, why you probably experience it. Certainly why we experience it with the UN, that it is also uncomfortable to prioritize. Because it inevitably means selecting a way some really nice and good stuff. And since most people want to be really nice and good people, they tend to want to say, rather let's do everything. And then, of course, later on realize you didn't quite actually manage to do that. So take what you just mentioned, the follow-ons from the Millennium Development Goals, the so-called Sustainable Development Goals. There, the UN's, and hence the World's Goals for 2016 to 30. We worked with 50 or actually more than 50 teams of economists across all of these different areas to look at where can you spend a dollar and do the most good. And we tried to tell the UN, please, please, please, don't just promise everything to everyone. Not only can't you do it, but it's also going to be phenomenally disappointing when you're, people realize this. And of course, it's going to lead to very inefficient helping. Because you're just going to spread all the available resources thinly across all of these areas. And very clearly, they didn't actually do that. They ended up exactly promising everything to everyone, everywhere, all the time. And while that sounds really good, it doesn't help you decide where should you spend your resources. What should we actually do? So we worked with 50 teams of economists to look at what are smart things to do in the world, what are less smart things to do. And of course, the smart things everybody loves, and they are like, wow, yeah, we should do more of that. But then you also say, but this is not quite a smart. And then people get all offended and say, well, but shouldn't we also do that? And the answer is yes, in a perfect world, we should do everything. But in a real world, we should do the smartest things first. And I think that's both why this is incredibly important and why we don't normally talk about this because it also offends people. It makes us feel like, but shouldn't we also do this and this and this and this. But that's the whole point of prioritization. Do a few really smart things first, then do all the pretty good things and then do the not so good things until you've run out of money. So let's just have a meeting of the minds on this as well. The great, and I suppose in some ways, unfortunate reality of life is that there are vastly more things expected of us, as well as as others, hoped for buyers, then we can possibly do with the time and the resources that we have. So that prioritization is necessary is an incumbent reality that there is nothing to be done about that. The only question. And anybody listening to this knows that's true. I mean, they know that because they're listening to what's essential podcast anyway. So they, you know, we come in with that understanding, but also they just know it because today they have more things than they can fit into their schedule. Because when they set goals, they're going to tend towards setting more than they can accomplish. And I struggle with this still even many years into this journey because to a non-essentialist, to an overachiever, you want to do it all. You know, you want to do everything for everyone. It's not essentialism's fault. It's not, you know, it's not beyond fault that prioritization requires facing tradeoffs. We're dealing with that all the time. There's only the question of how do you allow the tradeoffs to be manifest? Do you allow them to be manifest after the fact where everyone's disappointed and you've made a millimeter progress in a million different directions? And you haven't really made substantial progress in the things that you could really do something about. That's sort of option one or option two you, and I think it's really the only alternative is that you come at it with an essentialist framework. And you try to approach the dilemma of tradeoffs in a disciplined, thoughtful way so that you can maximize your contribution. You can make the biggest difference. And of course, you're saying that with this very simple but clever test of what's the maximum good I can do with a dollar. I mean, that's a very essentialist question. What's the maximum good I can do with a dollar? Let's not pretend that I can do everything with a dollar. What's the best I can do with it? What's the best use of it? So you have these 50 teams of economists. Well, first of all, let's just address why economists and again, I think there's two important caveats first economists certainly shouldn't be ruling the world. So this is not sort of an attempt to take over the world or anything, but they tell you something very important about exactly the tradeoffs they tell you what can you get for this dollar. So that's what, you know, that's their bread and butter. Obviously, if you talk to a health economist, they look at tuberculosis. They work with a lot of tuberculosis experts, but they have all the models from tuberculosis, but they are able to say how much will it cost to save an extra, say, a hundred thousand people? How much good will that do not only just in sort of an ideal setting, but what do we actually think you can get out of it? The second thing, of course, to remember with economists is that spending a dollar is not the only thing that we're trying to do. We're also spending time with spending effort. We're certainly spending our cognitive energy and many other things, but spending money is an essential part of this equation. And we're addressing that part. You could say very simply the world is spending about a hundred and fifty billion dollars in development aid. How would you spend that? We're spending much more both on, you know, peacekeeping forces and climate policy and many other things where we're spending a lot of research where we're spending it on the good of humanity. But, you know, so we're spending probably somewhere between half and a trillion dollars every year on trying to do good in the world. Let's talk about how we can spend that. But remember, I'm not talking about how you should spend the other 99 trillion dollars that we typically spend on hospitals and and, and, you know, hoppers and, and, you know, transfer money for it to poor people and infrastructure and all the other stuff. So this is a limited conversation and in that limited conversation, economists can really help. Every intellectual tradition emphasizes certain parts of the complex world of which we live. They're all trying to understand it from different places. One of the advantages of the mindset of an economist is the inherent reality of trade offs. It's built into the models. It is sort of the very heart of the matter. If you supply more of this, you're going to supply less of that. It's sort of built into the assumptions of the training of of economists. So you're not saying they have more insight than everybody else. No, they have an insight into a particular part of the decision making process. And that's why you chose them. So we're going to talk about the SD teams and what did you do with them? We were running concurrently with the STGs, so the sustainable development goals. So we actually asked them to look at the precursor, which was the high level panel that talked about all these different things that eventually turned out to be the STGs, or within each one of these, what do we know? So again, there are some things we don't know how to fix. Very obviously, if you were to say, what's the biggest problem in the world, you could argue that it's that we all die. We have a severe undisciplined immortality, but we don't know quite how to fix that. So we're not talking about stuff. We don't know how to fix. And perhaps more importantly, there are a lot of problems out there in the world that we just don't have enough information about. We don't know what cost. We don't know how well they work. But that's not so that was not what we looked at. We looked at all the things we do know how to fix. So we do know how to fix climate change or air pollution. We know how to make coral reefs better, but also we know how to deal with all the infectious diseases from malaria HIV tuberculosis to neglected tropical diseases. We know how to deal with malnutrition. We also know how to deal with problems like free trade or family planning. We know less well how to deal with corruption and the lack of understanding of where do money go, you know, basically that that a lot of companies shift money around the world. But we know a lot of about all of these things. So we asked economists in each one of these areas. So we worked, for instance, in corruption, we work with Mary Hildebrand of Harvard University, who has done a lot of work on corruption together with Susan Rosacumyn from Yale, who did the original corruption cost the world of trillion dollars. We work with them on what are the smart things you can do in corruption, how much will it cost, how much good will it do. And we did the same thing with infectious disease economists, on, for instance, how can we tackle tuberculosis and nutrition to small children and all the other challenges and all the other solutions. What is smart and this is really the sort of crux of the of what comes out and working together with economists does they have a neat trick to bring everything to the same denominator remember it's hard to compare what is the value of having, you know, a million more well fed children compared to a hundred thousand dads not dying from tuberculosis compared to a 16 coral reefs not dying. How do you compare that? Well, typically we do that with money. So we do that by saying what is the value that people are willing to pay for these kinds of things. Remember you do that all the time when you go to the supermarket not, you know, by coral reefs or or kids not dying, but you decide between very, very different things like oranges and apples but also, you know, laundry detergent and hang a cheese and everything else. You make these decisions because all of them have a price that basically allow you to decide well how much is my value of one thing versus another and that's essentially what we try to do we try to compare all of the cost which are typically dollars not all of them. And all of the benefits which are typically in people surviving people being better off for the planet being better off if we can manage to do this well and economists have been making a lot of work on that we can basically make this very simple point if you spend one dollar for instance on tuberculosis you will generate $43 of social good for the world by investing it into tuberculosis that's a great deal. That's a wonderful deal. We would do this in a blink of an eye if this is our private money. Of course this is not something you can get rich off of because you can't actually monitor us otherwise you know there already be billionaires doing this. But the trick is you can actually know how much good you will do for every dollar and that's what drives the ability to make very simple comparisons across all of these areas. You've said a couple of things here by where the structure of the decision making the first is don't take on everything just because something's a problem doesn't mean you can do something about it. So you know one prioritization lens is what can I do something about that seems to be one of the important points you've made. The second is to be able to gather data to be able to really I suppose put all of those potential solutions into a comparable list which is you know at some point I want to try and extrapolate how we could take the process you followed into our own prioritization efforts you know in lives and our teams and our organizations and so on. So maybe we'll just get back to that but I'm curious about the steps you took in the process you know actually having a two or three measurements that you could compare all of the solutions to clearly important parts of the process and then with that data with that information you go to these teams and what well then you don't actually go to these teams or we don't because if you ask to bear colossal economists what's one of the most important things in the world. He is going to be just like everyone else and tell you oh you should do to bear colossus yeah if you work with something you inevitably think that's one of the most important things in the world. So we actually go to so we had a team of top economists including Tuna of all arts who looked across all of these areas and said all right given all the evidence given everything we've seen what do we believe should be the top priorities informed by the cost benefit. But also where that this is you know this is not the only thing we should be looking at some things we actually have pretty poor data on and maybe we should still be focusing on them so let let me give you a couple of examples of things that work out and things that don't work out things that are obvious things that are less obvious. So for instance on corruption everyone will tell you corruption is huge but most people will also tell you but we don't know how to fix it. It's very hard to throw money at corruption and be successful there's a few ways you can do this one is to make sure that you get better procurement this sounds incredibly boring but actually a third of all development world spending goes to procurement so you know anything from post that notes to roads and obviously because roads are much more expensive this is you know infrastructure are the kind of things really very very corrupt. So one of the things we found for instance when we work with Bangladesh and the Bangladeshi government was that if you make essentially an eBay out of this so you let people bid online you put the bids up online it makes it harder to be corrupt in in Bangladesh it's actually such that you know typically it used to be that the ruling people in the local area would have already decided who gets the bid. And they would simply put up goons outside the office where you hand in your seal bid so you physically couldn't get in and delivery a bid by making this electronically it becomes a little harder to keep away the lower bids it also becomes a little easier for the really good ones the ones who are very effective maybe don't come from the region to deliver their goods we did a study of about 4% of the spending of Bangladesh and transferred it into. E procurement basically so that you could procure it in the most effective way turns out you can reduce spending about 12% and the quality probably increases this is a fantastic opportunity for very little money you have to you know a retool the bidding process you have to get about 125,000 that government employees apprentice into this project and you need to build the computer system you can save about. And you can spend about 750 million dollars every year in Bangladesh of tax ban money you have some 750 million dollars you can spend on other important things this is such an obvious thing you should definitely do it now a lot of countries are also doing this because it is a really good idea but there are lots of other ways you can't fix corruption so again we say fix this stuff you know but if you don't know how to fix it there plenty of other things so I mentioned one other thing to Berkulosis it turns out pretty regularly to be one of the best investments and one of the reasons I think is because it's a disease we've had for millennia remember of the last 200 years to Berkulosis probably killed about a billion people so it's been a really really big kill it used to kill lots and lots of people in the developed world as well that was why people would go to sanatoriums and you know we'd be really really scared about the consumption we used to call it that's all fixed in the rich world we know how to fix to Berkulosis it's you know it's mainly a matter of getting people diagnosed and get them problem medication so it's stopping a concern for rich people in the rich world we've stopped talking about it it's all hat it's boring problem that's why we don't really focus on it so it's apart maybe from COVID it's the world's single leading infectious disease killer kills about one and a half million people every year and we just don't really care about it and that's why we find that you can spend money here and do an incredible amount of good so this is an obvious thing but basically a one that's overlooked because it's not sexy if you will and that gets me you know to the sort of sexy but not very good interventions are lots and lots of those so you know one turns out to be in again this drives people up the wrong way one turns out to be water and sanitation so water and sanitation obviously huge issues lots of people you know so more than a billion people don't have access to clean water more than a two and a half billion people don't have access to sanitation leads to a lot of waste in spending time to get your water and to get somewhere to pee or defecate it also costs a lot of disease for women it means that they're more risk of being raped for instance so there are lots of great things and reasons why you should do something about it it turns out however that it's also very very costly especially for instance on sanitation we had a long conversation when we worked together with India this was of course not very politically correct to say because Modi of the PM in India has has decided this is one of his very very top priorities but the problem with getting good sanitation is it's actually very very expensive so it turns out unless you make the toilets you know good and you also keep them clean people won't use them so it turns out that you have to spend a lot of resources you do get paybacks so you typically see that you do about $3 worth of good for every dollar spent so that's it's good it's certainly better than just you know spending your money not getting anything out of it it's not that it's a bad idea it's just that it's not all that great compared to you know say 43 back on tuberculosis so again the point here is there are some things that are phenomenal there are some things that are just so so and then of course there are lots of things that are just not really worth the money where we spend it because it looks good it makes us all feel good but it actually ends up helping very little and now let's just take a moment for an ad break and now back to our conversation taking is now to the other side of the continuum of the 80 items there's a list of things that you're saying you can spend an enormous amount and get either no return on your investment or or a poor return on your investment what surprises you in that list? So I think one of the things is obviously climate change climate change is a really issue it's a real problem it will create problems through the world although it's probably you know vastly overblown in much of the media you know economic estimates indicate that will be if we do nothing about climate change this is the you and climate panel reports will be say somewhere between 2.6 and 5% less well off by the end of the century than we otherwise would have been remembered by then will be many hundreds of percent better off so it's a it's a problem it's not the end of the world and it's certainly something that we should also be focused on but many of the solutions that are being proposed are fairly expensive ways to help very little and typically far into the future so for instance you know it's very common that's one of the sustainable development goals but remember everything is a sustainable development goal but one of them is double renewable energy so doubling renewable energy obviously feels good especially in the first world context it also helps in developing countries you know the difference from not having any electricity to having the solar panel that actually enables you to have a light on or maybe a fan running can be really quite useful it's not nearly as transformational as we used to think when you look at it it makes people a little better off they say they're a little happier but for instance it doesn't actually increase schooling outcomes or incomes and that's mostly because most of the things that make us better off are not just a single solar panel or even a few of them because it's very intimate and it's you know fairly low quality power of something that you can't really run for instance a machine or a pump that will drain your your agriculture or a machine that will run some industry if you think about what made most countries rich it was actually that they got lots and lots of energy not just a little bit which is nice but it's a lot of energy so you know basically think the industrial revolution it's the fact that we've gone from mostly being dependent on our own work and maybe a work of a few draft animals and some wind turbines to make flower from wheat but it's actually going from that position where we mostly relied on our own power to you know having machines being able to do 10 times the work that what we do and that's what developing countries need as well so what we found was if you double renewable energy it will probably lead to and again I'm just cutting through all of the calculations it'll probably lead to benefits worth about $480 billion a year for the work that's great this is a lot of people being better off being more happy being able to do more things late in the in the evening you know being able to stay up maybe we have a TV power by by their solar panel and the battery but the cost will be about 580 billion dollars or to put it very bluntly for every dollar you spend you will only deliver about 80 cents of benefits that includes the climate benefit but also includes all the other benefits like you have more energy and so on that's a pretty bad investment spending a dollar and only achieving 80 cents it feels good it's part of the sort of standard argument of our value of oh we should be doing all of this these things but it doesn't actually deliver very much we know for it in the same sort of vein if you focus for instance on a Paris agreement kind of approach so the Paris agreement that we promise to cut our carbon emissions both the US and Europe and many others it'll have distinct cost it'll also have benefits mostly in cutting future temperature rises towards the end of the century and beyond if you try to estimate the cost through and there's a vast number of different models to try to do that and if you also try to estimate the benefit those are also lots of models to try and do that of of reduced damages from climate change in the late 21st century and onwards it turns out that for every dollar spent you will probably avoid about 10 cents of climate damage again pretty poor investment it does not mean that they're not great things to do in energy as well you know so we found for instance if you if you focus on spending a lot more research and development into green energy so basically focus on innovating the next set of technologies they'll become so cheap that everyone will want to use them if you do that every dollar will probably deliver about 11 dollars of avoid it climate change damage which is a much better approach but also much less sexy it doesn't it doesn't sort of strike the same cord with Fridays for the future and everybody else that we're doing something right now but it's more about saying this is the way that we've solved all problems that we saw them through innovation not by telling people to do with less so again we show some things in some of these areas that are not very comfortable but that we need to know because it turns out that if we spend on the sexy things the things that everybody talks about some of that money is going to be spent really well but some of it is going to be spent pretty ineffective if I had to sort of summarize what we're talking about here I I would agree first of all that that nothing we talked about feels like rocket science you know as you break it down you go okay well that that sort of what I would describe as discipline decision making quite quite known you know there's there's sort of 18 or 19 studies that are that I'm aware of that have studied you know the decision making process comparing let's say gut based decision making to formal decision making in the way that we've just described it using criteria evaluating those criteria and so on and and all of them have found that it is superior right like it does produce better outcomes than just shooting from the hip and and so that's really what you're advocating of course you're advocating at the particular sphere but you're still advocating for a discipline let's think this through rather than let's just make this decision kind of emotionally in the in the you know in the first instance let's think it through that doesn't mean that you we have now no place for for intuition in the journey no no place for in the end when you're trying to choose between these things there could be something beyond your analysis that that you that ends up trumping your decisions but let's at least have the data let's at least have it and and I think that that is supportive of a sort of fundamental idea of essentialism as I see it which is on the one side you have the undisciplined pursuit of more than emphasis on undisciplined here versus a discipline pursuit of less but better you know again focus on the discipline that you need a discipline process for making your prioritization decisions and if you don't have that you will default to an undisciplined approach where it can be your criteria your unnamed criteria can be any number of things including well who speaks loudest or who's most emotional about it or what is the you know for your work what is the medias you know really emphasizing the most right now whipping people up about it and so your actual unnamed criteria can be can be really awful somebody's criteria can be just you know what's the latest thing in their inbox that might have nothing whatsoever to do with the most important work in their lives I mean it literally might have nothing whatsoever to do with what the most important things are in their life or where the best use of their time energy resources is and yet because it's pressured or proximate suddenly it gets the attention or social media you're on social media I mean these things can be the criteria for making decision making they're just really undisciplined I think there's a connection point here between this approach that you've taken at these high level strategic prioritization challenges and a very everyday challenges that people are having and I wonder now that I'm making that point whether it's it's not more than coincidentally connected in the sense that every every leader whatever whether they're working in the UK government the US government the UN the EU you know they're all people too so they all have the same the same risk of falling into an undisciplined decision making process just like anybody else I think this I think this is very interesting and I think you're absolutely right that we need to realize that we'll probably be able to get a lot more mileage out of life if we're more disciplined if we think about the cost and benefits and acknowledge that they're there search through the the possible solutions I think the one big difference that I see and that I think is as necessary to mention is that there's different incentive structures for private people using this for their own lives and for politicians using this for nations or you know government officials in the UN doing this for the world for private people if you make this decision if you make this analysis and try to optimize your own life you have to live with the decision not so for most politicians you know most politicians will make a promise that by 2030 you know in the for the sustainable development goals 2030 we have to have reached all of these goals I'm not going to be a politician in 2030 I'll be out of the game so in reality what a lot of politicians manage to do is to make all the promises get all the applause and then leave the hard bits for someone else and and that's of course why a lot of politicians will say yes we should prioritize and then a little bit later they'll turn around and say I'm going to promise you everything and and so you know my experience back in New York in 2014-15 when we worked with the UN on doing this I actually met with about a third of all the UN ambassadors who were doing this so about 30-40 UN ambassadors individually in New York and they all love the concept they you know they just like we have this great conversation they're like oh yes I really want to know what what our cost and benefits and what really works and stuff when it came down to it of course you know the Norwegian ambassadors gold was not to make these the best targets in the world it was to get Norway's four targets in there and the Brazilian UN ambassador's gold was not you know the best targets it was to get Brazil's five targets in there and that's why we ended up with 169 targets so so in reality is that true was there a 169 is there there's 169 and remember they used to be 211 and and they felt oh that's a little many so they actually rewrote it so it became you know they kept the same number of words but they just you know concatenate a lot of sentences so it was only 169 you know there's literally almost every promise in there you know stop war stop poverty stop global warming get parks for handicapped people and everything in between and you know it's not that they're all nice and good sounding things but again you need to have a sense of if we can't do everything what should we do first and so the second bit of what I at least try to practice and I think this will also be relevant in a in a personal matter is we'll never succeed we will never get everyone to par it's eyes everything smartly rationally there's just not enough time there's not enough willingness and certainly for the politicians there's a lot of upside for just some like gnawing this and promising everything but what we can do is by making these analyses by making it more clear that some things are phenomenal and some things are not quite as phenomenal we make it a little easier to do the really smart stuff and a little harder to do the dumb stuff and so our you know so sort of our working principle here at Copenhagen consensus my think tank is not to get everything right it's about getting things slightly less wrong if we can manage to get the world to do slightly less wrong we've really really helped the world along so you know a humble goal I think is also worth having you know just like you you start out saying I'm now I'm going to prioritize everything I'm going to be smart about everything and you're going to be disappointed with yourself at the end of the day if you manage to make it a little smarter if you manage to make your surroundings a little smarter you boss a little or your organization a little better you've done great work that's I think the real challenge here is to recognize that by being insisting on smartness insisting on you know we have to prioritize we have to find what are the possible solutions and then evaluate their cost and benefits if we do those three principles as you outline and if we just do them sometimes and even if people often will not listen if we can just make it a little better that's great now that that's a beautiful way for us to end it's to let's be a little less wrong if you can if you can help people to consistently over time be a little less wrong you you know that's better than just making yourself feel good about not having transformed the prioritization you know super structure of the world it's also just going it's also just saying yeah that actually matters it can make a big impact there's a lot there's a lot to be gained by being a little less wrong over time the honest been an absolute pleasure to talk to you I thoroughly enjoy the way that you've approached this discipline approach that you've taken to it and the way that really you are challenging then you let's call it the emotional norms of the non-essential norms of let's just do everything now that is a that is a human challenge in every part of the human system as far as I'm concerned it is it is true for every person listening to this they all work in some sort of matrix organization or in a situation where people just have competing priorities and so it's a reasonable goal for them to to be able to try and help the people they work with people around them and themselves be a little less wrong thank you so much for being on the what's essential partners Greg it was great talking to you