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FAREED ZAKARIA, HOST: This is GPS, the GLOBAL PUBLIC SQUARE. Welcome to our viewers in the United States and around the world. I'm Fareed Zakaria. We have a timely show for you today -- debate between Bjorn Lomborg and Paul Krugman on global warming, and a free-ranging discussion with a panel of stars on Obama's Nobel Prize, Dubai, and all kinds of other things. First, my own thoughts on the subject of the Copenhagen Summit. Let me be honest. I have to confess to being unsure about the nature and extent of global warming. The data does seem to show that it's real, it's happening, it's manmade, and could potentially be catastrophic. But climate is a highly complex system with hundreds of moving parts, and the trends can and do shift. So, how sure am I, and how do I resolve this contradiction? I still believe we need to do something about it, and we need to put a price on carbon. That means either a carbon tax or a cap-and-trade system. See, I think about this the same way I do about insurance. I don't think that my house is likely to burn to the ground. But I'm willing to put a small down payment to deal with that unlikely outcome. The international body of scientists that have studied this topic suggests that temperatures are likely to rise between one and nine degrees Fahrenheit over the next 90 years. I'd be willing to put a small amount of money down now to slow down and prevent the rise of temperatures to the nine-degree range, at which point much of human life would be threatened. And by the way, the things that we would have to do to help preclude that bad outcome are good for the economy anyway. They would move us toward an energy revolution, one in which we find a way to use lots more energy without creating pollution or warming. Now, if we want to raise standards of living around the world and lift billions of people out of poverty, we need to find a way to use lots more energy in a way that is clean. So, it seems to me that buying some insurance is sensible through a carbon tax or a cap-and-trade system. The real question is how much? What's the price? Many of the estimates of what it would take to make reasonable progress on limiting carbon emissions hover around one percent of global GDP. If that sounds high, consider this. Over the past year, we have spent 5 percent of global GDP sorting out the global financial meltdown. Can we not spend one-fifth of that to ensure against a climate catastrophe? Anyway, that's my view. Let's get started.

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ZAKARIA: Now, to debate the crucial questions about climate change, I brought in two people who know a lot about it. Bjorn Lomborg wrote a book called, "Cool It: The Skeptical Environmentalist's Guide to Global Warming." And as I said the last time he was on this program, that gives you a pretty good idea of where he is coming from. Bjorn joins us from Copenhagen. Paul Krugman, the Nobel Prize winner and columnist for "The New York Times" once wrote recently that to deny climate change is to commit treason against the planet. Paul is here in New York. Welcome to both of you. Let me ask you, Bjorn, one of the reasons that people wonder where you actually stand on these issues is you've been writing a series of articles in "The Wall Street Journal." And they have been an attempt to show that the poor people who live in areas affected by climate change are actually more concerned about their poverty. But then in a recent column about the area around Mount Kilimanjaro, you threw in a couple of paragraphs saying, and by the way, it's not really clear that Mount Kilimanjaro is -- the ice is melting any faster than it's been melting in the past. What I have to ask you is, do you really believe that global warming is a significant enough issue and a large enough probability that you're willing to buy substantial insurance against it?

BJORN LOMBORG, AUTHOR, "COOL IT": I think we would all agree that there are clearly, very, very huge problems right now on this planet. And that's important to remember, because all of the attention here is on global warming. That's understandable, and we need to find a smart solution on climate change. But we also need to remember all the other problems, mainly stemming from poverty. Now, the issue on Kilimanjaro -- and I think a lot of other science reporters -- Fred Pearce, for instance, who is a very, very concerned science reporter at "New Scientist," who really wants a very strong deal in Copenhagen, has also said that Mount Kilimanjaro is probably the wrong poster boy, or what's that -- poster picture -- what's that phrase?

ZAKARIA: Poster mountain. LOMBORG: For global warming. Poster mountain, probably, yes. Because, fundamentally, most of what's happened is probably not due to global warming. And we simply have pointed that out that there is a sense in which everything gets ascribed to global warming, where, of course, in reality, some of the problems that we see are simply from natural causes or from poverty. But global warming is real and it is important. And then, to answer your last question, so, am I willing to buy, you know, to really care about global warming and do something extraordinary about it? Yes. Global warming is an important and significant problem. So, this is a question about saying, let's be smart on global warming, but let's not have it dominate everything else.

ZAKARIA: Paul?

PAUL KRUGMAN, "NEW YORK TIMES": If you're living in a world in which global warming is dominating everything else, it's a different world from the one I'm living in. I mean we're hoping to actually get something done for the first time right now. I do want to raise the issue of saying, well, there are more important things, there are other things that matter. That is not the relevant trade-off. You know, it's not the case that, if Republicans manage to block climate change legislation in the Senate, that Mitch McConnell will then turn around and say, well, now that we've saved that money, let's all spend it on aid to the poor in Africa. Right? The trade-off is, in fact, between doing something about global warming or just having it go into the same hopper as everything else we do. Holding up these other things that we ought to do as an alternative to global warming, that's essentially a fake tradeoff. It's not the trade-off we actually face.

LOMBORG: Paul, could I just comment on a few of those points? I think you're right that this is not -- cutting carbon emissions is not going to, you know, drive us to the poor house. I do believe that probably we are living in slightly different worlds, because you're right. In the U.S., global warming is much less of a problem and it's much less feared. But I think, if you look at the surveys from around the world, pretty much everywhere else, it's a much greater issue. And certainly it's one that looms very high on many newspapers and TV stations, and, of course, especially with the Copenhagen meeting going on. The second part is to say, sure, it doesn't cost the world to do climate change. But let's just remember, fixing all the other problems in the world don't cost the world, either. They actually cost even less. And so that's also slightly a fake argument. And the last point, to say that it's not going to go from developing aid budgets, that, again, may be true in the U.S. I'm not familiar enough with that process. But it's certainly not true in the rest of the world. "The Guardian" just leaked that the E.U. is actually expecting that most of the money -- and possibly all of the money -- that's going to go to help the developing world cope with global warming is going to come from development aid budgets. And OXFAM was out and saying, if you remove $50 billion from that budget, that is going to kill 4.5 million kids. Instead, had we spent that money on climate change policies, even rather smart climate change policies, it would have reduced temperatures by the end of the century by about one one-thousandth of one degree Fahrenheit. And that is a question. What do we want to be remembered for? Which of these two should we be focusing on first? I don't think you can reject that as just a false choice.

KRUGMAN: Look, this is not -- to judge the importance of things as a policy issue by how much they're on TV would be to be saying that the most important policy issue in the United States right now is the state of Tiger Woods' marriage. Right? I mean this is -- the point is, are we, in fact, spending a lot of money on climate change? Is it, in fact, crowding out development assistance? Is it, in fact, crowding out -- it's not. I mean, let's be serious here. If we, in fact -- if we actually do this climate change policy, one of the things that certainly strikes me from the U.S. point of view, is that it's actually going to be revenue-positive. It's going to be a source of money, which will actually free up some resources to do other things. But, again, I think that what it really comes down to in the end is that we have a reasonable probability of catastrophe. We don't know exactly how we're going to avoid that catastrophe, if we do. But getting in place a system that gives people an incentive to reduce their emissions has got to be an important part of the set of precautions we're going to take. And I think it's bizarre to be arguing all of these other reasons why we shouldn't do this, when it's actually not all that expensive.

ZAKARIA: Hold those thoughts. We will be right back after this, with Paul Krugman and Bjorn Lomborg.

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LOMBORG: If you're really concerned about global warming, it seems odd to me that you are then saying, so, let's tackle it through a policy that has failed for 18 years.

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ZAKARIA: And we are back with Paul Krugman and Bjorn Lomborg, debating climate change and what to do about it. Bjorn, do you fundamentally agree with the efforts of particularly the European countries in Copenhagen, which is to put a substantial price on carbon to slow down the emission of CO2 into the atmosphere?

LOMBORG: Fundamentally, the Europeans are claiming that they want to do this, but they're not really doing it. What we've actually seen is...

ZAKARIA: But I'm asking you...

LOMBORG: ... there doesn't seem to be a significant drop in the price of the...

ZAKARIA: ... I am asking you, do you support a carbon tax or a cap-and-trade system...

LOMBORG: OK.

ZAKARIA: ... that would raise the price of carbon?

LOMBORG: I support a limited rise of the carbon price, because that's what the economics tells us, that cutting carbon in a way that's substantially related to what the damage of the carbon cost is, that's absolutely warranted. But we should also recognize, that's not actually going to cut carbon emissions dramatically. What we do need is to have a lot more investment into research and development of green energy technologies. We need the technologies before we can make the switch to a low-carbon future.

KRUGMAN: Where we are now on the climate science is that some studies -- quite a few of them -- are now suggesting the possibility of really catastrophic warming, really catastrophic warming. And a fundamental principle here is that you don't look at the average of the studies. You look at the high-end risks, because that's where the real -- that's what you have to guard against. You have to guard against the substantial possibility of really catastrophic change. That means that you don't say, well, this is a small problem. That's not what these are saying. We have a lot of studies now saying that we're looking at something like a nine degrees Fahrenheit rise in temperatures by the end of the 21st century. That's huge. That means that you start working on all fronts. Of course we do -- you know, of course we do research and development. Of course. And we do research and development in medical care, but we also try to provide incentives for people to actually do the right thing. And that's what the health care debate in the United States is all about. So, I think it's -- you know, I really don't think, if I may say, I don't think this is sincere. If you say, well, you know, let's do research, that's mostly a way of postponing, when there's a lot of reasons to think that time may be running out.

ZAKARIA: So, Bjorn, let me ask you about this crucial element of the argument, which is, it would be all right to take a kind of modest and incremental approach, unless you worry about the small probability of a very bad outcome. So, that would be the small probability of temperatures rising six degrees Celsius, nine or 10 degrees Fahrenheit, by the end of the century, at which point human life on the planet seems at risk.

KRUGMAN: If I could interject, small probability is not what I'm hearing from the climate scientists.

ZAKARIA: OK, so...

KRUGMAN: It's a substantial probability.

ZAKARIA: ... some probability. And should you be buying insurance against that probability?

LOMBORG: Well, I think, fundamentally, let's get off that high horse of who is sincere. I'm sure Paul is sincere. I'm also being sincere about this. And the fundamental point here, of course, is, what we are trying to do right now, and what Paul is also saying, is that we should cut carbon emissions by implementing large-scale cap-and-trade. But I'm just looking around and saying, it's not actually happening. If you're really concerned about global warming, it seems odd to me that you are then saying, so, let's tackle it through a policy that has failed for 18 years. It failed in Rio. It failed in Kyoto. And it's probably also -- mostly, at least -- going to fail in Copenhagen. And there's a good reason for that. Because most of the economic studies show that cutting carbon emissions right now is fairly expensive, especially if you want to cut a lot. Why? Because we don't have the technology. So, this is not about being insincere. It's about being sincere, of wanting to do something about climate, so saying we want the technology and not put the cart in front of the horse and say, let's just put up these caps or these targets and then, unfortunately, not actually see them materialize, because governments are not willing to pay for them, and because we don't have the technology that'll actually be able to pick up the slack.

KRUGMAN: We haven't had a real cap-and-trade system for carbon. We've had some gestures in that direction. We have had cap-and-trade systems for other things. We have a cap-and-trade system for sulfur dioxide in the United States, which has been highly successful. It's cut it by more than 40 percent at much lower cost than was predicted. The idea that we can sit here -- sit here in our respective studios -- and say, well, we ought to have the wise men in a big research project somewhere in Geneva, or something, figure out what the technology is going to be, and that's the only serious thing we should be doing, that we shouldn't be providing a schedule of gradually tightening caps on emissions, which will give people a market incentive to worry about it -- that's just bizarre. And, you know, again, a lot of the things you can do. The McKenzie study, a lot of these studies do suggest that there's energy savings stuff that people would actually save money by doing, that they're not doing. I have enough sense that there are limits to rational behavior, that some of that is probably true. But the main thing is, there are lots of low-cost, prosaic, ordinary stuff -- not high-tech -- painting your roof white, you know, using a -- driving a smaller car. All of these are things that, given an incentive, people will do. Why not give them that incentive?

ZAKARIA: On that note, we've got to bring this debate to a close. One of these rare opportunities where I didn't have to do very much. I hope to have both of you gentlemen back on -- Paul, probably on the economy next time.

KRUGMAN: OK.

ZAKARIA: We will do it again. Thank you very much. And we will be right back.

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SIMON SCHAMA: The Afghanistan speech seemed to be a man in the state of terrible moral cramp, actually. And he's sort of neurotic, almost, about part of his own party fleeing because of Afghanistan. Hence, for me, the kind of fatal compromise of saying, we're going to do this, we are going to do this, but we'll do it 18 months.

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Originally broadcast, 12.13.09