Friday, May 30, 2008

Solving the World's Biggest Problems

Ronald Bailey of Reason reports on the Copenhagen Consensus 2008 Conference. The Conference is run by Bjorn Lomborg who wrote The Skeptical Environmentalist. The Conference brings together 55 leading international economists to reach a consensus on how to address some of the world's most difficult problems:

More than 55 international economists, including 5 Nobel Laureates, will assess more than 50 solutions and assemble a list of priorities for everyone involved in solving the world's biggest challenges.

The aim of CC08 is to take stock of the world's biggest problems and the most promising solutions and provide informed input into the policy making process surrounding efforts to deal with these problems. CC08 will revisit issues from CC04, as well as take up new issues in the light of improved knowledge of the state of the world since 2004. CC08 will provide an in-depth assessment of the costs and benefits of solutions to some of the biggest challenges the world is facing today.

The Challenges (problems) are:

Air Pollution
Malnutrition and Hunger
Sanitation and Water
Subsidies and Trade Barriers
Global Warming
Women and Development

The unique thing about the Copenhagen Conference is it's emphasis on cost and benefits. The participants are given $75 billion to spend over a four year period and the goal is get the most bang for the buck. The answers are somewhat surprising. Coming in at #1 is supplying vitamin A and zinc to 80% of the 140 million children who lack them in developing countries. This would cost $60 million per year and yield benefits in health and cognitive development of over $1 billion.

Number 2 on the list is to widen free trade through the Doha Development Agenda:

Number 2 on the list of Copenhagen Consensus 2008 priorities is to widen free trade by means of the Doha Development Agenda. The benefits from trade are enormous. Success at Doha trade negotiations could boost global income by $3 trillion per year, of which $2.5 trillion would go to the developing countries. At the Copenhagen Consensus Center press conference, University of Chicago economist Nancy Stokey explained, "Trade reform is not just for the long run, it would make people in developing countries better off right now. There are large benefits in the short run and the long run benefits are enormous."

Nobelist and University of California, Santa Barbara economist Finn Kydland noted that unless the economies of developing countries grow, they will still be mired in the same problems of poverty ten years from now as they are today. "By reducing trade barriers, income per capita will grow, enabling more people in developing countries to take care of some of these problems for themselves."

The rest of the list is available at the Copenhagen Conference website.

The use of cost benefit analysis to prioritize these problems removes the emotion from the equation. Since resources are limited it is only logical to use them wisely in ways that have the largest impact. Sending Vitamins to the third world may not be sexy and it may not win a Nobel Peace prize, but it has the advantage of being effective.

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