Will we be living better in 2050 than our predecessors did in 1900? The discussion over the state of the world, and whether things are getting better or worse, is not new. Scientists and philosophers have debated the topic for centuries. From Malthus to The Limits to Growth, pessimists have built their case for a future blighted by overpopulation, starvation, and depleted resources as optimists have tried to assure them that everything would be OK. The pessimistic view has proven influential, setting the tone of environmental and policy debates.
But rather than cherry-picking anecdotes to fit an overarching narrative, we should find a new way to compare global problems. Together with 21 of the world’s top economists, I have tried to do just that, developing a scorecard spanning 150 years. Our idea was to measure the damage inflicted by 10 important problems—including health, education, air pollution, and climate change—on a comparable scale, without reinforcing one viewpoint or the other.
Using classic economic valuations of everything from lost lives to bad health, considering factors including forfeited income from illiteracy and increased hurricane damage from global warming, the economists found the cost of each of our problems for every year from 1900 to 2013, and then made predictions out to 2050. To estimate the size of the problem, they then compared the challenge to the total resources available to fix it. This gives us the size of the problem in percent of gross domestic product (GDP).
Take, for instance, education. In 1900, 70 percent of the world was illiterate. How big of a problem was that? Well, economic estimates show that if everyone had been literate in 1900, the world would have been an inflation-adjusted $240 billion richer—or about 12 percent of global GDP (also known as GWP) in that year. So, in 1900, the global problem of lack of literacy took a toll equivalent to 12 percent of GDP.
Now, what does the research show? Neither the pessimists nor the optimists are entirely right. But the optimists definitely win on points—most indicators are going in the right direction (in the graphs below, the higher the percentage of GWP, the more severe the problem). That’s not to underplay the serious issues still confronting much of the world, especially in developing nations. But overall, we can stop panicking. Things are generally getting better.
And the results also show us where the substantial challenges remain for a better 2050. We should guide our attention not on the basis of eye-catching stories or noisy pressure groups, but on objective assessments of where we can do the most good.
Here is a sampling of our findings:
1. Air Pollution
Perhaps surprisingly, the biggest environmental problem in the world is not climate change; it’s indoor air pollution. All told, the effects from indoor air pollution killed almost twice as many people—260 million—than all the 20th century’s wars combined. The tally is four times higher than for outdoor air pollution. The graph above shows both the devastating impact and significant decline of these types of air pollution.
Most deaths attributable to household air pollution are caused by people in developing countries cooking and heating with dung and twigs. While indoor air pollution still kills 3 million people a year, cleaner fuels and a reduction in poverty have lessened the impact. Today it costs the world 6 percent of global GDP, down from 23 percent in 1900, and by 2050 it will be 4 percent. Overall, the risk has fallen eight-fold and will decline another 70 percent by mid-century.
2. Armed Conflict
Violent conflict is incredibly costly. On average, 20th-century military conflict cost about 5 percent of GDP per year, though the two World Wars cost about 20 percent and 40 percent of world GDP, respectively. Today, the cost of conflict has fallen to about 1.7 percent, and even pessimistic forecasts show only a small uptick to 1.8 percent by 2050. More optimistic assessments show further decline to 1.6 percent.
In accepting the 2009 Nobel Peace Prize, President Barack Obama stated, “We must begin by acknowledging the hard truth: we will not eradicate violent conflicts in our lifetimes.” But the evidence indicates that we have come a long way, turning the heavy military costs of the 20th century into what looks like a permanent peace dividend.
3. Climate Change
Climate change is real and man-made, but one of the more startling findings is that it is expected to have a net positive benefit through mid-century, as shown on the graph above. (A negative cost is a benefit.)
But why would climate change be beneficial? Increased levels of carbon dioxide work as fertilizer, boosting agriculture. This makes up the biggest positive impact at 0.8 percent of global GDP. Moderate warming also avoids more deaths from cold than it incurs additional deaths from heat. Finally, it reduces the demand for heating more than it increases the costs of cooling, totaling about 0.4 percent of GDP.
In total, warming is a net benefit for almost all years between 1900 and 2050. Since 1900, the benefits have increased, reaching a maximum of about 1.5 percent of global GDP in 2025. However, after the year 2070, as temperatures rise, global warming will become a net cost to the world, justifying cost-effective climate action now and in the decades to come.
4. Ecosystems & Biodiversity
Loss of biodiversity in the 20th century probably cost about 1 percent of GDP per year, though some regions of the world have lost much more. The economists involved in this study measured the major biomes in the world—from tundra to tropical forests and deserts—in 1900, 2000, and 2050.
The economists estimated biodiversity in a number of ways. Biomes are beneficial as places for recreation, but they also prove valuable by producing raw materials for use in everything from wood products to traditional medicine, and by storing carbon to help tackle global warming. Going forward to 2050, the economists estimate we will see an annual net benefit of about 0.25 percent of GDP because we’re now cutting less forest and employing better agricultural practices.
In order to compare educational attainment across 150 years, the economists looked at the costs of illiteracy. Today, 20 percent of the world population is still illiterate. Yet in 1900 that number was perhaps closer to 70 percent, and the problem cost 12.3 percent of GDP. Today, the loss is closer to 7 percent of GDP. By 2050, it is estimated global illiteracy will fall to only 12 percent, and the cost will have dwindled to just 3.8 percent of GDP.