| Copenhagen Consensus is a Danish project which seeks to establish
priorities for advancing global welfare using methodologies based on the theory of welfare economics. It was conceived [1] (http://www.copenhagenconsensus.com/Default.asp?ID=161) and organized by Bjørn Lomborg and the Institute for Environmental Assessment, funded largely by the Danish government, and co-sponsored by The Economist. A book summarizing the conclusions, Global Crises, Global Solutions, edited
by Lomborg, was published in October 2004 by
Cambridge University Press.
The participants are all economists, with the focus of the project being a rational prioritization based on economic analysis.
The project is based on the contention that, in spite of the billions of dollars spent on global challenges by the United Nations, the governments of wealthy nations, foundations, charities, and non-governmental organizations, the money spent on problems such as malnutrition and climate
change is not sufficient to meet many internationally-agreed targets. This argument is supported by evidence from the
World Bank, which estimates that the UN's Millennium Development Goals would cost an additional
annual $40-$70 billion on top of the $57 billion already spent as of 2004
[2] (http://www.fortune.com/fortune/brainstorm/0,15704,632592-1,00.html); this increased
expenditure would have to continue each year until 2015 in order to achieve the Millennium Development Goals.
The emphasis on "rational priorization" is justified as a corrective to standard practice in international development, where, it is alleged, media attention and the "court of public opinion" results in priorities that are
sometimes arbitrary and/or sentimental.
Process
The process used by the project depends heavily on the expertise of reputable economists to evaluate the costs and benefits of
addressing the ten major global challenges initially chosen by the project. Eight economists, including three Bank of Sweden Prize in Economic Sciences in Memory of
Alfred Nobel winners, met May 24 - May
28, 2004 at a roundtable in
Copenhagen. Ten stimulus articles were prepared by other economic experts, one
on each of the challenges. Each article summarizes some current knowledge about one of the challenges, identifies from three to
five opportunities to solve or ameliorate the problem, and contains cost and benefits estimates, calculated on particular
assumptions with varying levels of uncertainty, related to the challenge. For each article, two critiques were written by other
reputable economists, in an attempt to achieve a balanced perspective. At closed-door sessions the experts reviewed the articles
and the critiques, and produced a ranking based on applied welfare economics of the 30-50 identified opportunities.
Experts
"Nobel Prize" winners marked with (€)
Challenges
The author of the primary article about each challenge is also listed
The experts started with ten challenges and several "opportunities" within each:
The experts agreed to rate seventeen of the opportunities within seven of the ten challenges. Projects were rated in 4 groups:
Very Good, Good, Fair and Bad
Very Good The highest priority was assigned to implementing certain new measures to prevent the spread of HIV and AIDS. The economists estimated that an investment of
$27 billion could avert nearly 30 million new infections by 2010.
Policies to reduce malnutrition and hunger were chosen as the second priority. Increasing the availability of micronutrients, particularly reducing iron deficiency anemia through dietary supplements, was judged to have an exceptionally high ratio of benefits to costs, which were
estimated at $12 billion.
Third on the list was trade liberalization; the experts agreed that modest
costs could yield large benefits for the world as a whole and for developing nations.
The fourth priority identified was controlling and treating malaria; $13 billion
costs were judged to produce very good benefits, particularly if applied toward chemically-treated mosquito netting for beds. [3] (http://www.iht.com/articles/110312.html)
Good The fifth priority identified was increased spending on research into new agricultural technologies appropriate for developing nations. Three
proposals for improving sanitation and water quality for a billion of the world’s poorest followed in priority (ranked
sixth to eighth: small-scale water technology for livelihoods, community-managed water supply and sanitation, and research on
water productivity in food production). Completing this group was the 'government' project concerned with lowering the cost of
starting new businesses.
Fair Ranked tenth was the project on lowering barriers to migration for skilled workers. Eleventh and twelfth on the list were malnutrition projects - improving infant and child
nutrition and reducing the prevalence of low birth weight. Ranked
thirteenth was the plan for scaled-up basic health services to fight diseases.
Poor Ranked fourteenth to seventeenth were: a migration project (guest-worker
programmes for the unskilled), which was deemed to discourage integration; and three projects addressing climate change
(optimal carbon tax, the Kyoto protocol and value-at-risk
carbon tax), which the panel judged to be least cost-efficient of the proposals.
Criticisms
The Copenhagen Consensus project has been widely criticised. Some critics, including economists (Sachs, 2004) have questioned
the validity of its cost-benefit approach to extremely complex and scientifically uncertain situations, its use of particular
discount rates to generate current and future values, its assumptions about the availability of aid and, more broadly, the
competence of a panel consisting exclusively of professional economists to make assessments across such a wide range of subject
matter. Other critics may be sceptical of the project because of its association with Bjørn Lomborg. Lomborg had argued in his
controversial book, The Skeptical
Environmentalist, that resources allocated to mitigating global warming would be better spent on improving water quality and
sanitation, and was therefore seen as having prejudged the issues. In addition, the members of the panel, selected by Lomborg,
were seen as a likeminded group of free-market economists, not likely to be supportive of government intervention to protect the
environment. To deflect this likely criticism, the organizers convened a parallel panel of young people to hear the arguments
presented in the challenge papers and by the discussants, and to give their own list of recommendations (which was largely
aligned with the experts' ranking).
The release of the report provoked fresh controversy, although the first two priorities identified (combating AIDS and
malnutrition) were widely agreed to be of critical importance. Particularly controversial within the final ranking were trade
liberalization's high placing (many anti-globalists would
reject it, seeing it even as actively harmful), and the low ranking of the options addressing climate change.
Not considered
The Copenhagen Consensus did not consider some highly topical issues, such as a cost-benefit analysis of the war on
terrorism. The direct financial spending on this issue dwarfs the money that the panel were notionally allocated. It is not
clear if this is because the issue was considered too controversial, or if the authors implicitly assume that some issues are to
be considered beyond cost-benefit calculations.
References
- Sachs, Jeffery D. (Aug. 12, 2004). Seeking a global solution. Nature, vol 430, p725-726.
External links
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