Bjorn Lomborg: Priorities required in spending of aid

COMMENT

We spend a lot of money and resources trying to improve the lives of the world's inhabitants. This is most obvious through overseas development and aid - in 2002 New Zealand spent $264 million - but is also achieved through trade policies, funding of research into diseases, investment in environmental protection, peacekeeping missions, and United Nations agencies.

Do we do enough? The UN aims to increase aid money from industrial nations to the equivalent to 0.7 per cent of each country's gross national income. For New Zealand, reaching this goal would require tripling aid spending.

How should this extra money - adding up to billions of dollars - best be spent? Should it simply be added to programmes already receiving funds? Should more be specifically spent on education initiatives, greenhouse gas reductions, or attempts to reduce malnutrition?

No doubt organisations helping starving children in Africa would clamour for the money but so, too, would those helping war-torn nations to develop infrastructure. Sometimes it seems that the loudest receive the most money; it is true to say that media focus helps to set our development agenda.

I am not convinced that the problems we hear most about are always the best ones to deal with first. Our money should be prioritised on a cost-benefit basis, with an aim to do the most good in the world with every dollar spent.

Some find it blasphemous to combine the subject of prioritisation with the grand challenges facing our planet. Comparing global warming and malaria prevention is like comparing apples and oranges, they say. Besides, we ought to have money to handle it all.

The harsh truth is that we don't have money for everything. Prioritising does mean comparing apples and oranges, but so does every public policy decision. Governments compare health care with education spending to make their priorities in annual budgets. Doing good for the world is no different - every dollar spent means a dollar less for another project.

We know that our money is doing some good in the world. But is it achieving the most it possibly could? And if nations such as New Zealand are to increase their spending, how could the extra money best be allocated?

Next month a group of prestigious thinkers will try to answer these questions for New Zealand and the world. Nine economists, including four Nobel laureates, will meet as part of the Copenhagen Consensus conference, organised by Denmark's politically independent Environmental Assessment Institute, co-sponsored by the Economist magazine.

The economists will examine 10 of the biggest challenges facing humanity, ranging from climate change and communicable disease to conflicts, malnutrition and trade barriers.

Each problem carries its own set of tragedies. Every day about 800 million people are starving; more than a billion lack clean drinking water. The UN puts the number of international migrants, including refugees, at 120 million, and estimates there are 860 million illiterate adults in the world.

We know what the major challenges facing humanity are. What the dream team of prestigious economists gathering in Copenhagen will do is provide information on the best ways to solve or ameliorate these problems.

They will estimate the costs and benefits of opportunities to confront every major challenge, then compare those opportunities with each other. Thus they will be able to compare the cost and benefits of providing clean drinking water to half of the people who lack it, with the costs and benefits of investing in a malaria vaccine, or of combating global warming through the Kyoto Protocol. The result will be a prioritised, concrete ranking of opportunities, along with estimated costs and benefits.

Some groups - particularly non-governmental organisations that receive and spend aid money - have criticised the Copenhagen Consensus conference for drawing global attention away from the existing prioritisation of resources. They point out that the world has already signed up to "millennium development goals" through the UN. These numerous goals outline honourable intentions of bettering the world by 2015, but they have not been prioritised - we don't even know if they are the best ones to address first.

In an ideal world, we would have the money to commit to every positive initiative that would improve the lot of humanity. That is not the case. The Copenhagen Consensus conference is about using the resources the world does have in the best possible way.

The results can only be positive, both for those who receive aid money and for nations such as New Zealand that spend it.

* Bjorn Lomborg is the director of Denmark's Environmental Assessment Institute, and the author of The Skeptical Environmentalist. He visited New Zealand last year.