Most people seem to believe that the state of the world is getting worse—that poverty, malnutrition, and inequality are increasing, while the air and water become more polluted, forests continue to shrink, and global warming threatens humankind.

Yet the data tell a very different story. Humanity’s lot has improved dramatically—not just in the developed world but in the developing world, where the poverty and malnutrition rates, both 50 percent in 1950, have dropped to 25 percent and 17 percent, respectively, and the illiteracy rate has dropped since 1970 from 80 percent of the population to 20 percent.

In the rich world, the environmental situation has improved. In the United States, the most important environmental indicator, particulate air pollution, has been cut by more than half since 1955, rivers and coastal waters have dramatically improved, and forest acreage is increasing. And these trends are generally shared by all developed countries. Why? Because we are now rich enough to care for the environment.

In much of the developing world, environmental indicators are getting worse. But these countries are only acting as we once did. They care first about feeding their kids before cleaning up the air. Affluence will make the environment a higher priority. In some of today’s richer developing countries, such as Mexico and Chile, air pollution is already beginning to decrease. In the rich world, most people probably expect global warming to become the most important environmental challenge over the next 30 years. They’re wrong.

Global warming is real. The trouble is that even large amounts of money will buy very little improvement. The Kyoto Protocol, even with U.S. participation, would only postpone by six years the warming expected in 2100 if we do nothing, and would cost $150 billion annually. For half that amount, the United Nations estimates, we could provide clean drinking water, sanitation, and basic health care and education for every single person in the world, now.

The main environmental challenge of the 21st century is poverty. When you don’t know where your next meal is coming from, it’s hard to care about the environment a hundred years down the line. When your kids are starving, you will slash and burn the rainforest; when you’re rich, you’ll be a Web designer in Rio and vote green.

The single most important environmental problem in the world today is indoor air pollution, caused by poor people cooking and heating their homes with dung and cardboard. The UN estimates that such pollution causes 2.8 million deaths annually—about the same as HIV/AIDS. The solution, however, is not environmental measures but economic changes that let these people get rich enough to afford kerosene.

How do we make a better world? This question was answered by the Copenhagen Consensus project. Here, eight of the world’s top economists (including four Nobel laureates) established a global priority list based on elaborate assessments by 30 economics experts.

At the top of the list they put preventing HIV/AIDS, malnutrition, and malaria, and abolishing agricultural subsidies. These are the areas in which we can do the most good per dollar for the world. Kyoto ended up at the bottom of the economists’ list because it would cost a great deal and do little good.

By investing in research and development that will make renewable energy cheaper, we can make sure that our grandchildren will be able to cut the CO2 emissions that cause global warming. But if we are smart, our main contribution to the global environment 30 years from now will be to have helped lift hundreds of millions out of poverty, sickness, and malnutrition while giving them a chance to compete in our markets. This will make a richer developing world, whose people will clean up their air and water, replant their forests, and go green.

Bjørn Lomborg is the organizer of Copenhagen Consensus, adjunct professor at the Copenhagen Business School, and author of Global Crises, Global Solutions (2004) and The Skeptical Environmentalist (2001).