Copenhagen Consensus
Copenhagen Consensus is a Danish project which seeks to establish priorities for advancing global welfare using methodologies based on the theory of welfare economics. It was conceived and organized by Bjørn Lomborg and the rest of the Institute for Environmental Assessment, funded largely by the Danish government, and co-sponsored by The Economist.
The participants are all economists, with the focus of the project being a rational prioritization based on economic analysis. In spite of the billions of dollars spent on global challenges, by the United Nations, the governments of wealthy nations, foundations, charities, and non-governmental organizations, the money spent on problems such as malnutrition and climate change is not enough. The World Bank estimates that the UN's Millennium Development Goals would cost per year an additional $40-$70 billion on top of the $57 billion already spent annually as of 2004 ; this increased expenditure would have to continue each year until 2015 in order to achieve the Millennium Development Goals.
The emphasis on "rational priorization" is both a recognition that the funds provided for global challenges will remain insufficient, and a belief by the organizers that media attention and the "court of public opinion" results in priorities that are sometimes arbitrary and/or sentimental.
Process
The process used by the project depends heavily on the expertise of reputable economists to evaluate the costs and benefits of targeting the ten major global challenges initially chosen by the project. Eight economists, including three Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel winners, met May 24 - May 28, 2004 at a roundtable in Copenhagen. Ten scientific articles were prepared by other economic experts, one on each of the ten challenges. Each article summarizes current knowledge about one of the challenges, identifies from three to five opportunities to solve or ameliorate the problem, and contains cost and benefits information related to the challenge. For each article, two critiques are written by other reputable economists, in an attempt to achieve a balanced perspective. At closed-door sessions the experts reviewed the articles and the critiques, and produced a ranking based on applied welfare economics of the 30-50 opportunities listed in the articles.
Experts
Nobel Prize winners marked with (¤)
The experts ended up rating seventeen of the opportunities within seven of the ten challenges. Projects were rated in 4 groups: Very Good, Good, Fair and Bad
Very Good
They assigned the highest priority to implementing certain new measures to prevent the spread of HIV and AIDS. They estimated that an investment of $27 billion could avert nearly 30 million new incidents of infection by 2010.
Policies to reduce malnutrition and hunger were chosen as the second priority. Increasing the availability of micronutrients, particularly reducing iron deficiency anemia through dietary supplements, has an exceptionally high ratio of benefits to costs, which were estimated to be $12 billion.
Third on the list was trade liberalization; unlike the top two priorities, lives are not at risk, but the experts agreed that this challenge's modest costs yielded large benefits both for the world as a whole and for developing nations.
The fourth priority is to control and treat malaria; $13 billion produces very good benefits for the cost, particularly if applied toward chemically-treated mosquito netting for beds.
Good
The fifth priority is increased spending on research into new agricultural technologies appropriate for developing nations. Three proposals for improving sanitation and water quality for a billion of the world?s poorest followed in priority (ranked 6 to 8: small-scale water technology for livelihoods, community-managed water supply and sanitation, and research on water productivity in food production). Closing this group was the project concerned with government - lowering the cost of starting new business.
Fair
Number 10 was migration project on lowering barriers to migration for skilled workers. Eleven and twelefe were malnutrition projects - improving infant and child nutrition and reducing the prevalence of low birth weight. Number 12 was the scaled-up basic health services project for fighting the diseases.
Poor
Numbers 14-17 contained migrations project (guest-worker programmes for the unskilled), which was deemed to discourage integration, and climate change projects (optimal carbon tax, the Kyoto protocol and value-at-risk carbon tax), which the panel judget to be least cost-efficient of the judged proposals.
Criticisms
The Copenhagen Consensus was widely criticized before it met. Many disliked its cost-benefit approach, its panel consisting exclusively of professional economists, and its association with Bjørn Lomborg (who holds controversial views on the environment). In response to this, the Consensus organized a parallel panel of non-experts to give their own list of recommendations (which was largely aligned with the experts' ranking).
The actual release of the report provoked less controversy, since its number 1 and 2 priorities (AIDS and malnutrition) are universally agreed upon to be highly important. The most controversial parts of the final ranking are trade liberalization's number 3 spot (many anti-globalists would reject it, seeing it even as actively harmful), and the low ranking of the climate change recommendations.
See also
