For the catastrophic outcomes out there now, there is not a very good sense of whether these are even plausible or just theoretical. And theoretical risks are present for anything that spans a century. If we don't do something about HIV / AIDS we could theoretically have regime collapse across sub-Saharan Africa, with widespread terrorism, armed with both nuclear and easily accessible biological weapons. You can throw in risks in any scenario. I'm skeptical of this argument when it only focuses on climate change and not on other issues that also have huge uncertainties.

SA: Don't we have some responsibility to preserve the well-being of future generations?

BL: Yes, but we also have responsibilities to the present generations. If you look at what we actually do, we care about the future a little but not a lot. We do save some things, but not everything. If you look at actual behavior it implies the discount rate [a measure of how much goods in the future are worth today] should be around 4 or 5 percent. If you argue that we should be worrying more about future generations, then you should lower this discount rate, which has the benign effect of making doing something about climate change more affordable. But it should be consistently applied across all issues. If you do the same for HIV / AIDS or malaria, not only will you save lives today, which is what is counted in a cost–benefit analysis, but you will also make societies much, much richer in the future and save many more lives way into the future.

SA: What is an appropriate policy then?

BL: Negotiations for the successor to the Kyoto Protocol will conclude in Copenhagen in 2009. We should spend 0.05 percent of world GDP on research and development into noncarbon-emitting energy technologies. That would be 10 times what we spend today.

SA: Isn't that already happening?

BL: Well, it would be 10 times more than what we do now. Moreover, our present policies are more focused on cutting emissions right now than making better choices available later. We are buying lots of inefficient solar panels but I want us to focus on making them much cheaper and more efficient later. In Denmark we put up lots of windmills in the 1970s and 1980s and 1990s. They were hugely inefficient. So we cut down all the inefficient windmills, about 10,000 of them, and replaced them with efficient ones. Maybe we should predominantly have put up the efficient ones. Yes, you need some demonstration models but the focus should be on making better windmills. Only once they are efficient should you buy a lot of them. It's the same thing with solar panels.

Of course, you can make solar panels efficient now by simply taxing coal, but that would result in enormous cost to the economy. We spend roughly 4 percent of GDP on energy. If solar panels are 10 times as expensive as fossil fuels, you spend 40 percent more on solar panels and go carbon neutral but it would have huge cost to the economy.

This is a nonlinear process. As long as solar panels or other technologies are more expensive, it doesn't matter whether they are 10 times more expensive or twice as expensive. It really only matters when it becomes cheaper than fossil fuels. When should you buy all the solar panels? When they are most efficient and cost the least. So spend a lot on research and development.

SA: You are arguing for spending on problems like malaria or HIV / AIDS rather than climate change because of your cost–benefit analysis. But can't we do both?

BL: This is not a zero-sum game, but it is a finite game. You can only spend money once. The money that Richard Branson offered as a prize for climate change is not money that he can also offer for malaria. As long as you don't have enough money to do everything, spending on climate is a fairly poor way of helping in the world.