Economists rank global problems

Asked to put a price tag on the world's most pressing problems, a group of economists came up with an intriguing list, writes PAULA OLIVER.

The top five

Copenhagen Consensus economists' top five:

* Control of HIV/Aids

* Target malnutrition through food supplements

* Trade liberalisation

* Malaria control

* Target malnutrition through developing new agricultural technologies appropriate for poor countries


When top Swiss economist Bruno Frey told colleagues he was going to Denmark to solve the world's 10 biggest problems, they said he was crazy.

"They were right," says the University of Zurich professor. "It is crazy. But the alternative is simply doing nothing. I think doing nothing when we have these problems in the world is even more crazy."

Professor Frey joined seven other economists, including three Nobel laureates, to take part in an ambitious and controversial gathering this month tagged the "Copenhagen Consensus".

Organised by the Danish Environmental Assessment Institute - a Government-funded independent organisation - the week-long conference hoped to produce a list of priorities for world development aid funds.

The identity of the chief organiser meant it was bound to produce controversy. Bjorn Lomborg, the famously sceptical Danish environmentalist, was at the helm.

He posed the question: if governments collectively had an extra US$50 billion ($79 billion) to spend to improve the world, what should they do first?

Dr Lomborg's event enjoyed heavyweight support from the Danish Government, with Prime Minister Anders Fogh Rasmussen and two other senior ministers making appearances.

At the opening Mr Rasmussen reminded the conference that no problem had ever been solved simply by throwing money at it.

A "dream team" of economists selected by Dr Lomborg was given the task of working out, on a cost-benefit calculation, what should get attention first - water and sanitation problems, or malnutrition and hunger? Communicable disease or financial instability? Subsidies and trade barriers or corruption? Climate change or migration? Civil war or education?

The cost-benefit exercise ran into flak from the first day.

"We disagree with the set-up," said Danish Ecological Council director Christian Ege Jorgensen, who organised a counter-conference called Global Conscience.

"It's hard to capture in money value things like biodiversity, and animal and plant species. Those things didn't make the list of the top 10 challenges."

In fact, there was a host of worthy issues that did not make the top 10 - mostly because the participants thought there was no clear solution to them.

The top 10 were chosen using United Nations data and a ballot of the economists.

A major hindrance to the use of cost/benefit analysis emerged during the conference - a lack of information on which the economists could base their assessments.

"It's a real concern that the information is quite imperfect," Professor Jere Behrman, who wrote about malnutrition and hunger, told reporters.

"The challenge for us is to take that imperfect information and make it comparable to other areas."

One of the economists, Professor Thomas Schelling, later stated that he thought Dr Lomborg had a "slightly exaggerated idea of how far cost/benefit analysis could take us".

Asked if that meant that the foundations of any list produced at the end of the conference were shaky at best, Dr Lomborg was firm in his view.

"The point of the conference is not to say we have finished, let's go home," he replied. "It's about making as much information available as possible. We will learn where more information is needed. This is the beginning of the process."

Despite the shortage of data the economists backed Dr Lomborg's ambition. "I think Bjorn Lomborg has a very good, serious idea," Professor Schelling said. "It's a useful exercise."

Their work led them to a fraught exercise - how to value human life.

An attendee from the World Health Organisation, David Evans, said he found it ethically unacceptable that many of the papers used a percentage of gross national income on a per capita basis.

That meant, he said, the life of someone from a developing country was valued lower than that of someone from a richer country.

Despite the dilemmas and doubts about the conference's methods, Dr Lomborg maintained his amiable and casual demeanour throughout.

He emphasised that the Copenhagen Consensus was the first time anybody had attempted what the panel was doing.

The daily meetings were held behind closed doors, an arrangement that troubled journalists, but Dr Lomborg claimed it allowed open discussion without fear of saying something controversial.

At the end of the week, the panel revealed its conclusions to a stage-managed press conference.

The economists had put a proposal to tackle HIV/Aids at the top of their priority list.

It involved spending US$27 billion on a scheme estimated to prevent 28 million cases by 2010. The expected benefits were calculated at 40 times the expenditure.

The panel considered the urgency of the problem was extreme, especially in Africa where it threatened entire societies with collapse.

Second on the list was a proposal to use micro-nutrients to combat the effects of malnutrition and hunger.

The panel said that diseases caused by iron, zinc, iodine and vitamin A deficiency could be prevented by the supplements. The programme was estimated to have an exceptionally high ratio of benefit to cost. The panel recommended it receive a further US$12 billion.

The final part of their theoretical US$50 billion purse went on two projects - eliminating subsidies and trade barriers at very little cost, and fighting malaria with insecticide-treated mosquito nets and a medication programme.

The top four proposals were rated as "very good". Among proposals that rated "bad" were three dealing with climate change, including the Kyoto Protocol, of which Dr Lomborg is a well known critic.

"It's not an issue that should be ignored," Professor Nancy Stokey said of climate change. "But the three proposals involved very large expenditures, laying those costs on society right now, and the benefits come very far into the future. The three proposals were all far too extreme."

Nobel laureate Professor Vernon Smith said the context of the panel's review of climate change issues was unique.

"The countries that endorsed the Kyoto Protocol did not face the situation we did. We faced comparing it with HIV/Aids. It's a question of timeliness. Other problems are more urgent, more pressing."

The outcome looked a little too convenient to Dr Lomborg opposition to Kyoto but the economists insisted they had acted entirely independently.

Dr Lomborg himself said that climate change was an important issue, but when confronted with limited funds, the decision had been made that other things should be tackled first.

Scarce information on education, civil war and financial instability prevented the panel ranking any proposals in those areas.

Would the rankings have been different had the economists heard better proposals on each topic - particularly climate change?

"Perhaps, yes," Professor North said.

"On some issues we did not see proposals," Professor Stokey replied.

Several stated that they would do the exercise differently if it was attempted again, but they felt that it was a good start.

Professor Smith said he had approached the task of ranking a proposal with two questions: was it going to give someone more freedom, and did it help them to help themselves?

What effect the Copenhagen Consensus will have remains unanswered. Will the findings fade into obscurity and the conference be labelled another talkfest, or will it have an impact?

Dr Lomborg pledged to take the priority list to the G8, the OECD, and other global institutions.

The Danish Prime Minister said that if the conference produced useful insights he would use them at international summits.

The Copenhagen Consensus would, he optimistically said, provide politicians with facts and figures needed to make tough decisions, and "help us shortcut the path from words to action".

The economists themselves were cautiously optimistic about the effect of their effort.

"I hope it generates a lot of debate and controversy," Professor North said with a grin.

* Paula Oliver travelled to Denmark courtesy of the Copenhagen Consensus Secretariat.