A Consensus: Wonderful, Wonderful Copenhagen

By May 27, 2008Global Warming

The Copenhagen Consensus is under way in Denmark, a gathering of economists who are going to attempt to create a reasonable list of priorities for spending money: Do we do more good spending $50 billion on potable water, curing AIDS, fighting maleria, combatting global warming or FILL IN THE BLANK SOCIAL GOOD? A thought-provoking exercise, given that a leading figure in the project is Bjorn Lomborg, the Skeptical Environmentalist who, even while acknowledging climate change, doubts the value of vast government expenditures on global warming that will serve mostly to make the world poorer.

Ronald Bailey of Reason Magazine is on hand, and he reports:

But the fact is that in a world of scarce resources, a couple of big issues will get the bulk of the available resources. Trade-offs have to be made. When Lomborg is speaking of resources, he is basically talking about foreign development aid. What the Copenhagen Consensus hopes to do is help donors, both public and private, to spend their money is ways that solve the most urgent problems.

To illustrate how issues might be ranked, Lomborg cited some findings from a paper dealing with the challenge of disease. Spending $1 billion on controlling tuberculosis would save 1 million lives and result in estimated benefits of $30 billion for a benefit-cost ratio of 30 to 1. Spending $200 million on treating heart disease in poor countries (which accounts for 25 percent of deaths in those countries) with an inexpensive “polypill” combining aspirin and statins would produce $5 billion benefits implying a 25 to 1 benefit-cost ratio. And a $1 billion spent on malaria produces a benefit-cost ratio of 20 to 1.

More at the U.K. Times.

Engaging in cost-benefit analyses is a bracing antidote to the mix of mysticism and apocalyptic thinking that now dominates public policy debate of the environment.

And in debating costs and benefits, we hope the economists also remember to keep the value of liberty central to their deliberations.

(Hat tip: Glenn Reynolds.)

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