Nearly a quarter of rich-world development aid — $49bn — now goes to climate finance, while the number of people in extreme poverty has not fallen since 2016. That is the central claim of Indermit Gill, former chief economist of the World Bank, and Bjorn Lomborg, president of the Copenhagen Consensus (a think tank that ranks development investments by cost-benefit returns), in a joint argument that aid must return to human welfare.

The stakes are historical. In 1950, more than half of humanity lived on less than a dollar a day; today the share is 7.6 per cent, the lowest ever recorded. Average schooling has almost tripled, from 3.2 years to nearly nine, and electricity access has soared. Yet global progress is now at its slowest pace since 1950, according to the World Bank.

What changed in 2016?

The authors point to a single institutional shift. In 2016, the world retired the Millennium Development Goals — a shortlist of mostly efficient, targeted aims covering poverty, disease, maternal and child deaths, and universal schooling. The Sustainable Development Goals replaced them, and climate change became the rich world's obsession.

Nowhere is this clearer than in aid budgets. In the United Kingdom, climate-tagged finance accounted for 26.7 per cent of development-aid commitments in 2024, or $4.342bn, according to OECD data. Across the rich world, the figure is $49bn, nearly a quarter of all development commitments. Multilateral development banks (institutions owned by governments that lend for development) spend about half their development money on climate — roughly $103bn for low- and middle-income countries.

The authors argue that the logic behind this shift is seductive but wrong. Because poor people are more vulnerable to climate change, agencies such as the Foreign, Commonwealth and Development Office conclude that climate policy is crucial for development. Poor people, Gill and Lomborg counter, are more vulnerable to everything: disease, hunger, broken infrastructure and economic shocks. The real question is whether climate policy is the best way to help them.

What do the returns show?

The core problem, the authors write, is opportunity cost: every dollar subsidizing solar panels or carbon accounting is a dollar not spent on schools, maternal health or clean water. Research by the Copenhagen Consensus, involving more than 100 economists and several Nobel laureates, quantifies the gap:

• Nutrition, health and education investments routinely deliver $40 to $110 in social benefits per dollar.
• Climate-mitigation investments in poor countries often deliver much less back.
• Micronutrient supplements for expectant mothers cost $2.50 and prevent stunting and lifelong cognitive damage, returning nearly $100 in long-term benefits.
• Tuberculosis and malaria programmes, which address diseases still killing more than a million people a year, return more than $45 per dollar invested.

Sustained economic growth, they argue, is the surest predictor of resilience. A 10 per cent rise in per capita gross domestic product can cut the number of people most exposed to climate disruption by 100 million, according to a World Bank document. A hurricane kills hundreds in poor Haiti; the same storm merely inconveniences wealthy Florida.

Is the energy argument hypocrisy?

The energy dimension is the sharpest. Much of Africa uses less electricity per person than a single refrigerator in a Western home. Fossil fuels still supply over 80 per cent of global energy, yet most rich-world agencies and development banks refuse to finance new fossil-fuel projects in poor countries, a stance formalized at COP26.

Germany's record looms large in their case. The country has spent over €700bn on its energy transition since 2002; power prices more than doubled, and its economy remains almost four-fifths fossil fueled. To demand that African nations achieve what Germany cannot, with a fraction of the resources, the authors write, is not climate leadership. It is hypocrisy.

The authors do not call for abandoning climate policy. Adaptation and green innovation deliver strong returns. But they urge the UK to follow Norway, where an official expert group has recommended separating climate financing and other global public goods from the development budget.

Africans ranked climate change 31st among 34 priorities in a recent Afrobarometer survey. Most of humanity is still quite poor, the authors conclude, and the rich world should spend billions on urgent, cheaply solved problems before spending trillions to nudge the thermometer in a century.