Climate change is a man-made problem, but campaigners and irresponsible politicians have distorted this out of all proportion and now falsely call it an existential threat that could eradicate humanity. This exaggeration grossly misrepresents the science in reports from the United Nations Intergovernmental Panel on Climate Changes.

Moreover, it is repudiated by the world’s leading climate economists, including the only one to win the Nobel Prize. The cost of no further action on climate is equivalent to lowering GDP 2-3 percent by the century’s end: It is a problem, not the end of the world.

Yet the incessant scare stories have driven some Western governments to enact immensely costly policies. The United Kingdom has gone further in climate policies over the past two decades than nearly any other country. As a result, the inflation-adjusted electricity price, weighted across households and industry, has tripled from 2003 to 2023. By comparison, the price of electricity in the United States has remained almost unchanged over the same period.

At the same time, the rich world is increasingly realizing that it faces many other expensive challenges, including an aging population bringing higher pension and healthcare costs, crumbling infrastructure, poor educational outcomes and a need for larger defense spending.

Yet the European Union has committed itself to net-zero carbon emissions by 2050, which will cost over 10 percent of its GDP annually, or 3.3 trillion euros (US$3.81 trillion). This is more than today’s entire core spending across all 27 EU countries on health, education, police, courts, prisons and defense.

It’s important that Indonesia gets the balance right between the challenges and opportunities in front of it. A considered, balanced response to climate change means rolling out solar and wind in areas where that is sensible while realizing that the longer-term solution to climate change must be innovation.

In 1970, when hunger stalked 35 percent of the developing world, the answer was not making the whole world eat less to redistribute food. It was innovation through the Green Revolution, which dramatically increased yields and brought better varieties and more fertilizer.

Likewise, we will not solve climate change by joining the British, being poorer, colder and with less power. Instead, the leading industrial nations that are responsible for the majority of carbon emissions need to ramp up innovation in future generations of low-carbon energy. Once they innovate clean energy to be cheaper than fossil fuels, everyone will be able to switch.

Adaptation is another vital climate change response. Farmers across Indonesia know this already: They adapt to suit changes in the climate. In cities, we know that adaptive infrastructure like green areas, more reflective surfaces and water features help keep temperatures cooler. Adaptation can avoid a large part of the climate problem.

Finally, poverty alleviation is a crucial part of the response to climate change. Lifting people out of poverty reduces their vulnerability to climate shocks like heat waves or hurricanes. Moreover, wealthier, more prosperous societies can afford better protection from the elements, along with better nutrition, health care and social protection. Wealthy countries can spend more on environmental protection and all other good things.

Being smart about climate change also means that governments will have more resources to invest in solving other important challenges.

One such investment: We should boost maternal and newborn health through a simple package of basic emergency obstetric care and more family planning. Globally, this could save the lives of 166,000 mothers and 1.2 million newborns every year, delivering an astounding Rp 87 in social benefits for each rupiah spent.

Another phenomenal investment is agricultural research and development, to help Indonesia’s farmers become more efficient.

Globally, a modest investment of $5.5 billion annually could go a long way and free 133 million people from hunger. By 2050, this additional funding will boost agricultural output by 10 percent, reduce food prices by 16 percent and increase per capita incomes by 4 percent. And more efficient agriculture will reduce global climate emissions by more than 1 percent. Each rupiah spent delivers Rp 33 in social benefits.

In total, prioritizing the 12 best policies for development around the world could save 4.2 million lives every year and generate $1.1 trillion in economic benefits at a cost of just $35 billion a year.

Indonesia has immense possibilities ahead if it can seize the opportunity to invest wisely and judiciously. It should avoid the singular climate focus of some Western countries and invest based on rigorous economic science in areas where it can make the most impact and the greatest progress.

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The writer is president of the Copenhagen Consensus, a visiting fellow at the Hoover Institution and author of False Alarm and Best Things First.