If you had $75 billion on hand to solve some of the world’s biggest problems, how would you spend the money? Would you seek to eradicate life-threatening disease or to combat malnutrition? Enhance access to drinking water and sanitation or clamp down on greenhouse gases in an effort to forestall global warming? Where would an additional $75 billion, or any other amount, do the most good?
This was the question considered by the Copenhagen Consensus, a project of Skeptical Environmentalist author Bjørn Lomborg based at the Copenhagen Business School. Lomborg gathered several dozen economists to analyze and consider the world’s greatest challenges and assess the cost-effectiveness of various solutions. In the end a panel of eight, including five Nobel laureates, produced a prioritized list of potential policy measures.
Combating malnutrition, increasing childhood immunization, and liberalizing trade topped the list. More politically fashionable priorities, such as global warming, air pollution, and tobacco control, did not measure up. The distribution of vitamin A and zinc supplements to malnourished infants in sub-Saharan Africa and parts of Asia can generate an estimated $1 billion in benefits for a modest $60 million investment, and devoting $1 billion to tuberculosis control could save one million lives valued, for the purpose of calculation, at approximately $30 billion. Such expenditures have benefit-cost ratios of 17-to-1 and 30-to-1, respectively, and produce immediate results for real people living today. Investments in low-carbon energy technologies, on the other hand, have a hard time returning a dollar for every dollar spent and don’t produce meaningful benefits for years. Even accounting for the risks of global warming, climate control is a poor investment compared to more pressing alternatives.
It is certainly a fair criticism that global funds cannot be easily reallocated from one cause to another; money is fungible, but international bureaucracies don’t move that quickly. But the process of quantification and comparison serves a useful purpose in establishing priorities for those who wish to see each charitable dollar do the maximum achievable good.
A more trenchant criticism is this: Solving the world’s problems requires more than money, particularly in developing nations. Without strong institutions, including property rights and the rule of law, there is little hope for impoverished nations to generate the economic resources necessary to provide better lives for their people. And without competent and non-corrupt bureaucracies — something we in the West often take for granted — there is little hope that foreign-aid transfers can fill the gap. Nonetheless, analyses like that produced by the Copenhagen Consensus are a useful tonic to the ill-conceived agenda of United Nations bureaucrats and NGO busybodies who would rather tax air travel and ration energy than encourage tangible solutions to real problems that much of the world faces in the here and now. International policymakers, and the next presidential administration, should take some of its recommendations to heart.