Reliable and affordable energy is vital for today's developing and emerging economies. Driven mostly by its five-fold increase in coal use, China's economy has grown 18-fold over the past thirty years while lifting 680 million people out of poverty.
Almost three billion people still don't have access to modern energy, they use firewood, dung and crop waste for cooking and heating indoors, which is so polluting, the World Health Organization estimates they kill one of every thirteen people that die on the planet. Most of these are women and young children. Women and children are also the ones who have to spend their time fetching firewood, often from quite far away.
But because electricity is often powered by fossil fuels it does contribute to the problem of global warming, for which reason climate-worried campaigners suggest that developing countries should skip the fossil step and move right to clean energy. However, rich countries are already finding the move away from coal and oil to be a difficult one, and there are no easy answers for developing economies.
Today's crucial question is: what should the world prioritize? Fifteen years ago, the world agreed the Millennium Development Goals, an ambitious set of targets to tackle poverty, hunger, health and education. The UN is now considering the next set of targets for 2016-2030. My think tank, the Copenhagen Consensus, has asked some of the world's top economists to make analyses within all major challenge areas, estimating the economic, social and environmental costs and benefits of different targets.
Isabel Galiana and Amy Sopinka, the two economists who wrote the main paper on energy, argue that providing cleaner cooking facilities - efficient stoves which run on liquefied gas - would improve health, increase productivity, allow women to spend time earning money and free up children to go to school.
The economic benefits of getting everyone off dung and wood are as high as the human welfare ones: more than $500 billion each year. Costs would be much lower. Including grants and subsidies to purchase stoves, annual costs would run about $60 billion. Every dollar spent would buy almost nine dollars of benefits, which is a very good way to help.
A more realistic target of providing modern cooking fuels to 780 million people at the much lower cost of $11 billion annually would be even more efficient, with $14 back on every dollar spent.
While clean cooking is important, electricity can bring different benefits. Lighting means that students can study after dark. Clinics can refrigerate vaccines and other medicines. Water can be pumped from wells so that women do not have to walk miles to fetch it.
The value of getting electricity to everyone is about $380 billion annually. The cost is more difficult to work out. To provide electricity to everyone would need the equivalent of 250 more power stations, but many rural areas might best be served by solar panels and batteries. This is not an ideal solution, but would still be enough to make an enormous improvement to people's lives. The overall cost is probably around $75 billion per year. That still does $5 of benefits for each dollar spent.
If we want to tackle global warming, on the other hand, there are some targets we should be weary of, whereas others are phenomenal. One prominent target suggests doubling the world's share of renewables, particularly solar and wind, but this turns out to be a rather ineffective use of resources. The extra costs of coping with the intermittent and unpredictable output of renewables makes them expensive, and the cost likely to be higher than the benefits.
However, the world spends $548 billion in fossil fuel subsidies, almost exclusively in developing countries. This drains public budgets from being able to provide health and education, while encouraging higher CO₂ emissions. Moreover, gasoline subsidies mostly help rich people, because they are the only ones to afford a car. To phase out fossil fuel subsidies would be a phenomenal target, because it would cut CO₂ while saving money for other and better public uses. The economists estimate that every dollar in costs would do more than $15 of climate and public good.
With such high-return targets, the economic evidence shows that - if carefully chosen - energy targets should definitely be part of the promises for the next 15 years.