Bjørn Lomborg

At an October 12 AEI-Brookings Joint Center conference, policymakers considered ways to more wisely deploy limited resources to alleviate global problems based on the most up-to-date scientific knowledge and economic analyses. A panel discussion considered the findings of the Copenhagen Consensus, which has ranked global problems like HIV/AIDS, climate change, trade barriers, and malnutrition according to the cost effectiveness of the solutions proposed for each, and John D. Graham, head of the federal Office of Information and Regulatory Affairs, considered the dangers of overreaching regulation for confronting public health concerns.

The Copenhagen Consensus, headed by University of Aarhus (Denmark) professor Bjørn Lomborg, studied proposals to alleviate global humanitarian concerns and sought to answer: "What would be the best ways of advancing global welfare, and particularly the welfare of developing countries, supposing that an additional $50 billion of resources were at governments' disposal?" The panel, consisting of eight of the world's most distinguished economists, judged thirty proposed solutions to ten global challenges and ranked each, predominantly based on economic costs and benefits. The panelists considered solely the economic costs of delivery for each proposal, including the cost of undertaking necessary institutional reforms to enhance implementation once the political decision to proceed had been made.

The control of HIV/AIDS, providing micronutrients to combat malnutrition, and liberalizing trade came out on the top of the list, while climate change proposals such as the optimal carbon tax and the Kyoto Protocol ranked among the least effective expenditures.

Lomborg participated in the event and defended the methodological approach of the project, noting that economists were chosen to gauge public policy funding based on their expertise in prioritization, that the $50 billion figure represented a realistic amount of money that could be spent, and that the panel achieved a perhaps surprising amount of consensus given the diverse and pressing needs for social funding.

AEI's Roger Bate praised the Copenhagen Consensus for prioritizing public expenditures, but he cautioned that increased HIV/AIDS spending can only truly work by improving infrastructure and that private-sector efforts should also be taken into account, particularly with regard to the fight against malaria (the fourth priority on the list). William R. Cline of the Institute for International Economics criticized the panel for ranking climate change proposals as least effective--a ranking he claimed could hinder such efforts--and for creating false constraints with an arbitrary figure of $50 billion. Professor Thomas C. Schelling of Harvard University countered that combating climate change is best handled through economic development rather than simply transferring resources to underdeveloped countries. He recommended that the next Copenhagen Consensus effort focus on the interrelated nature of the various global challenges it addresses.

Graham discussed problems associated with the European Union application of the precautionary principle in public health issues and why U.S. regulators resist its universal application. According to Graham, while the basic idea of precaution clearly sounds sensible, the EU usually assumes that early indications of danger, particularly regarding climate change and public health, are understated. Graham argued that examples such as the FDA's now-defunct ban on saccharine as a potential carcinogen and the failure of $50-million worth of research to verify fears of increased cancer risk among populations living near power lines prove that public policy solutions lacking proper scientific proof can prove costly, impede technological innovation, result in lower living standards, and provide camouflage for protectionism.