Copenhagen Consensus

In 2002 the Environmental Assessment Institute, a Danish organization, had a rather novel idea: given that there is a finite amount of money in the world, how can it best be spent in an economic sense. They formed an organization called the Copenhagen Consensus and recruited leading economists from around the world, including some Nobel Prize winners, to answer that question. Papers were presented in Copenhagen in 2004, but for some unknown reason, word of the conclusions these economists reached has only now been made available in this country by that bastion of capitalism, the Wall Street Journal.

Of course, you have to agree with the basic premise that economic analysis of rates of return is a good way to establish priorities for the use of resources to solve basic problems. Some may not agree, but, if you have limited money, you have to prioritize, you have no choice. And rate of return – i.e., what are the expected and realistic benefits to be gained from my investment – is a good way to set the priorities.

The work of the consensus is available on the web. Here’s a summary of their conclusions:

Very good projects:
Control HIV/AIDS
Provide micronutrients to combat malnutrition
Liberalize trade
Control malaria

Good projects:
Develop new agricultural technologies
Improve water and sanitation on a small scale to enable people to earn money
Enable communities to manage their own water supply and sanitation
Lower the cost of starting a business

Fair projects:
Lower barriers to migration of skilled workers
Improve infant and child nutrition
Reduce the prevalence of low birth weight
Improve basic health services

Poor projects:
Guest worker programs for the unskilled
Optional carbon tax
Kyoto protocol
Value-at-risk carbon tax

There are some interesting conclusions here, particularly the low payoff of projects to counter global warming. It behooves further study.