TCS Daily


What to Do First to Save the World

By James K. Glassman - June 10, 2004 12:00 AM

For the leaders of the world's richest countries, meeting this week at the G8 Summit on Sea Island, Georgia, there's no more important question than, "What should come first?"

At last, we have the answer.

Earlier this year, a panel of nine of the world's most distinguished economists set about deciding where -- beyond short-term efforts to fight terrorism -- developed nations should put their money to make the world a better place. Where can we get the most bang for the buck (or the euro, the pound or the yen)?

Now the results are in. Ranked at the top of the panel's list as "very good" and "good" projects are programs to fight disease, clean up water supplies, liberalize trade and encourage entrepreneurship.

At the bottom of the list, rated as "bad" uses of public funds, are programs to combat possible climate change, including the Kyoto Protocol.

The results are a ringing endorsement of the priorities of President Bush, who committed $15 billion to battle AIDS, malaria and tuberculosis and rejected Kyoto as "fatally flawed."

The findings are a reproach to many European leaders and to left-wing environmentalists, health activists and anti-globalists, whose sloganeering has dominated much of the discussion of global welfare issues. This report -- sober, non-partisan and compassionate, with an emphasis on sound science and economic cost-benefit analysis -- makes the noisy radicals look foolish.

As far as I can tell, policymakers have never established a priority ranking for solutions to the world's problems. But earlier this year, the Environmental Assessment Institute of Denmark, headed by statistician Bjorn Lomborg (author of "The Skeptical Environmentalist") and The Economist magazine, based in London, decided to try, picking nine economists and backing them up with academic papers by experts from around the world.

The nine economists included four Nobel Prize winners: Robert Fogel, James Heckman, Douglass North and Vernon Smith. The other five, writes The Economist, "can expect to pick up a few more Nobels between them in due course": Nancy Stokey, Thomas Schelling, Jagdish Bhagwati, Bruno Frey and Justin Yifu Lin.

The panel, which calls itself the Copenhagen Consensus (CC), issued its list of priorities last week, but, in the crush of news over Iraq and the death for former President Ronald Reagan, hardly anyone reported it. That's a shame.

The number-one priority is control of HIV/AIDS. By spending $27 billion, rich countries can avert 30 million infections, mainly in Africa and Asia, over the next six years. "Costs are small in relation to what stands to be gained," says the report (available at www.copenhagenconsensus.com).

A paper for the CC by Anne Mills and Sam Shillcutt, of the London School of Hygiene and Tropical Medicine, points out that a program to prevent HIV in Thailand achieved a ratio of benefits to costs of 15 to 1 -- "a figure," writes The Economist, "that governments could scarcely dream of achieving for typical public-investment projects in other economic sectors."

Ranking second is a more unusual project -- "reducing the prevalence of iron-deficiency anemia by means of food supplements," at an estimated cost of $12 billion. Third is the promotion of free trade, which "was agreed to yield exceptionally large benefits." Fourth is control of malaria, a disease that afflicts 300 million people and causes 2.7 million deaths annually.

Of the top 10 priorities, seven are related to health and three of those concerned lack of safe and affordable access to water and sanitation.

Just as important, of the 17 proposals that were ranked by the CC, the three that came in last involved climate change. The still-unratified 1997 Kyoto Protocol, which seeks to thwart global warming by requiring the reduction of human-caused emissions of carbon dioxide, finished 16th.

The list, in my view, is correct in almost every detail. It will drive radical environmentalists nuts.

On climate change, the panel offered Kyoto every possible break, and it still flopped. The back-up paper used assumptions that were absurdly generous to backers of the treaty, including a low discount rate and questionable projections of dire temperature increases. The CC concluded that Kyoto and two other popular carbon-abatement programs had "costs...that were likely to exceed the benefits."

The Copenhagen Consensus report should be required reading for the eight world leaders gathered this week in Georgia. It's time for the Europeans, especially, to admit that, on the critical question of global welfare, George Bush has got it right.


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