A few comments to "Copenhagen Consensus 2012" |
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The conference The third "Copenhagen Consensus" conference was
held
in May 2012 in Copenhagen. The set-up was very much like in the two
preceding
conferences in 2004 and 2008. The Copenhagen Consensus
economists were asked how the world should best spend $75 billion (58
billion euros) over a four-year period, which Lomborg says is only 15
percent more than the global aid spending today. As usually, a list of ten major issues facing
the planet was defined in advance. For Copenhagen
Consensus
2012 the ten issues were:
Armed
conflict, Biodiversity, Chronic Disease, Climate Change, Education,
Hunger and
Malnutrition, Infectious Disease, Natural Disasters, Population Growth,
Water
and Sanitation. Following the same format
as past Copenhagen Consensus projects, first, the Center
commissioned
research papers on the costs and benefits of solutions to ten different
global challenges.
Two sets of papers - 'Challenge Papers' and 'Perspective Papers' - were
commissioned, to ensure that there was a range of expert
points-of-view. An expert panel of five economists -
including
to a great extent the same Nobel laureates as previously - examined the
research papers and
met
with the lead authors in May 2012. After deliberations, the expert
panel
created a prioritised list of solutions to the ten challenges. As
previously, the Center expects that
this list
will be utilized as an input by donors, governments and
philanthropists. The resulting list of prioritised solutions was
announced on May 14th. The list can be seen here:
According to the official outcome documents,
the priority list shows
the most
cost-effective investments. Thus, we are given the impression that the
top priority is the one giving the highest return rate of each dollar
invested, whereas all the following investments give lower and lower
return rates, as we descend down thorugh the list. In the paragraph titled `methodology´, we
read: "In ordering the proposals, the panel was guided predominantly by
consideration of economic costs and benefits. The panel acknowledged
the difficulties that cost-benefit analysis must overcome . . .
but agreed that the cost-benefit approach was . . . indispensable. In
setting priorities, the panel took account of the strengths and
weaknesses of the specific cost-benefit appraisals under review, and
gave weight both to the institutional preconditions for success and to
the demands of ethical or humanitarian urgency. . . " Strange
prioritisation The top priority is a project called `Bundled
micronutrient interventions to fight hunger and improve
education´. Here, it is said, each dollar spent has at least a
$30 payoff. And a related project, improving agricultural productivity,
is said by Lomborg to give a payoff of about $16 per dollar spent. Some other highly prioritised investments are
deworming of schoolchildren and expanding tuberculoses treatment, which
are claimed to have return rates of 35 and 20, respectively. Further down the list, we find a very
controversial project, that is geo-engineering to reduce the intensity
of incoming solar radiation to counteract global warming. According to
a background paper, such investments would give a return rate of about
1,000. In spite of this enormous return rate, this is given moderate
priority, apparently because it is deemed rather uncertain if this will
actually work as intended. The lowest ranking accepted project, project
no. 16, is called "Borehole and public hand pump intervention". This
has an estimated benefit-cost-ratio of loess than 3.4. Next, we come to priority no. 17, the highest
ranking not-accepted project. This is "Increased funding for
green energy research and development". According to the authors of the
background paper, this has benefit-cost-ratios of 10 or more if the
time horizon is slightly more than 1 decade. It is therefore a
bit strange that this is placed below a project with a clearly less
favourable benefit-cost-ratio. It is peculiar that the top-ranking measure to
do something about global
warming (apart from geo-engineering) is placed as the uppermost of the
rejected projects. Considering that the ranking in general is rather
subjective and not the result of a strict ranking in order of
cost-benefit-ratios, one may feel a suspicion that this placement on
the list is a deliberate provocation. Priority no. 18 is very remarkable. This is
reducing population growth by increasing the availability of family
planning. According to the background paper by Hans-Peter Kohler, each
dollar spent on this issue will give benefits of $90 to $150. This
makes sense to most environmentalists: By reducing population growth,
especially in Subsaharan Africa, we will alleviate nearly all other
problems in the region. Now, with this large benefit-cost-ratio, this
project should have much higher priority than the `Bundled
micronutrient interventions´. So, why is that not so? When we
look in the outcome statement, we find no explanation. There is only a
short, very general text which tells nothing concrete about this
subject. So improved family planning is thrown out of the list of
approved projects without any
explanation. The reader is left to wonder for himself. Maybe we
see the influence of strong religious American organisations here? So, contrary to the impression given by
Lomborg, the priority list is not an objective list based mainly on
benefit-cost-ratios.
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