EVENTS

Date:	Tuesday, October 12, 2004
Time:	10:00 AM -- 1:15 PM
Location:	St. Regis Hotel, Mount Vernon Room 923 Sixteenth Street, NW Washington, D.C. 20036

October 2004

Risk, Science, and Public Policy: Setting Social and Environmental Priorities

On October 12, 2004, the AEI-Brookings Joint Center hosted a conference on prioritizing global humanitarian challenges. In May 2004, Bjørn Lomborg organized the Copenhagen Consensus, a comprehensive study by a team of distinguished economists that was designed to determine which social and environmental problems could be solved most effectively with the world's limited resources. Panelists reviewed the results of the Copenhagen Consensus in anticipation of the publication of its findings in Global Crises, Global Solutions.

 

John D. Graham
Office of Information and Regulatory Affairs (OMB)

Dr. Graham gave an introductory overview to different approaches to environmental and other regulatory problems, focusing on the contrast between the European Union's reliance on the precautionary principle and the United States' opposing view. Dr. Graham noted that the precautionary principle is not a single, well-defined principle but more of a general tendency to regulate strictly against potential hazards whose effects are not well-known. He emphasized that incorporating precaution into policy is valuable, and that the U.S. government frequently does so, but that the need for preventative regulation must be well supported by scientific evidence. He argued that being overly cautious can lead to regulation of products and phenomena that turn out to be less harmful than initially believed, ultimately harming consumers by increasing costs to businesses and creating unnecessary trade barriers. Finally, Dr. Graham expressed encouragement that the United States and the EU are finding some common ground. He cited European court cases that have struck down the precautionary principle as a basis for regulation without sufficient empirical evidence and U.S. efforts to quantify uncertainty in cost-benefit analysis as examples of movement toward a reasonable, unified treatment of precaution in policymaking.

Bjørn Lomborg
Department of Political Science, University of Aarhus in Denmark

Professor Lomborg, the coordinator of the Copenhagen Consensus, spoke about the purpose and design of the project, its results, and its broader implications for global policy. He started by criticizing the widespread lack of acknowledgement that prioritizing global challenges is necessary, noting that resources are limited and that trying to solve every problem simultaneously is inefficient and ends up not solving any problem well. He explained that the goal of the Copenhagen Consensus was for a team of economists to decide how $50 billion in global aid over a four-year period could receive maximum returns or alleviate the most possible suffering. After filtering through the relevant research and consulting with various experts in each field, the "dream team" formulated a list of seventeen proposed solutions to environmental and social challenges, ranked in order of how cost-effectively they could be surmounted. At the bottom of the list was climate change, as addressing it was expected to have the lowest return among all of the problems considered. At the top of the list, with the highest expected payoffs, were treating diseases such as HIV/AIDS and malaria, reducing malnutrition by distributing micronutrients, and improving economic development through lower international trade barriers. Professor Lomborg stressed that beyond the results, two important goals of the project were increasing dialogue about prioritization and identifying which problems can and cannot be solved effectively using available methods. He hopes to repeat the Consensus every four years and is optimistic about the positive impact it will continue to have on improving solutions to global humanitarian challenges.

Roger Bate
AEI

Dr. Bate agreed that treating HIV/AIDS should be among the top global humanitarian priorities, and he added water sanitation as an issue of top concern. For each of these areas, Dr. Bate identified some of the major shortcomings of current solution methods and offered alternatives that he believed would be more successful. He argued that the private sector has much to offer in terms of innovation and diversity of problem-solving, and that leaving them out of global aid projects to the extent they are now is significantly counterproductive to achieving humanitarian goals, even if there is agreement on which ones to pursue.

William R. Cline
Institute for International Economics Center for Global Development

Dr. Cline expressed disappointment with and objected to the low priority that the Copenhagen Consensus assigned to climate change. Dr. Cline cited a model he had constructed in a recent paper to argue that regulation of global warming-causing agents was justified on economic grounds. He took issue with what he called a false dilemma rooted in the time and resource constraints set in the Copenhagen exercise. The relatively small amount of resources and short time-frame to deal with problems naturally favored challenges that could be addressed and measured more immediately, rather than challenges with longer time-horizons but potentially larger economic impacts, like climate change. He was concerned that by labeling climate change a "bad" investment, the project would be used to justify inattention to climate problems. He also pointed out that many proposed solutions to climate change, such as taxes of various types, are revenue-raising rather than revenue-depleting, and thus determining returns on aid spent may not be an appropriate way to measure their impact.

Thomas C. Schelling
Harvard University and the University of Maryland

Professor Schelling argued that the best means of combating climate change is to facilitate economic development rather than simply dedicating resources to abatement, which he viewed as an inefficient welfare transfer from developed to undeveloped countries. He largely agreed with the conclusion of the Copenhagen Consensus that challenges in which the most effective and most immediate relief could be provided should be addressed first, and that disease, malnutrition, and economic development best fit this criteria. He suggested temporary compensation for the removal of duties as one possible way to use aid to advance freer trade. Finally, he recommended for the next Consensus an increased focus on the interrelatedness of various global challenges and consideration of synergies across domains in solution design.

AEI-Brookings Joint Center research assistant Jesse Gurman prepared this summary.