Friday, June 11, 2004

The Copenhagen Consensus

"What the hell is that, some Robert Ludlum novel?" is most likely the response you have from reading the title. Well, it's a conference partly sponsored by the Danish Government. They brought together some of the world's leading economists (sorry Paul Krugman, your invitation was...lost) and had them apply cost-benefit analysis to the world's leading problems. They ranked the issues thusly, and were given a mythical $50 billion to spend.

Here are the global problems they felt were "very good" projects, or projects where the return on investment was greatest:

  1. Control of HIV/AIDS
  2. Providing Micronutrients to malnourished
  3. Removal of trade barriers and subsidies
  4. Control of Malaria

And here are the four "poor" projects, or projects where the money spent would show little if any return:

  1. Guest worker programs for unskilled labor
  2. Optimal carbon tax
  3. Kyoto Accord
  4. value-at-risk carbon tax

I found this all quite interesting. Though the cost for AIDS prevention was high ($27B), the result would be 30 million averted infections by 2010, and the prevention of possible societal collapse on a continental scale in Africa.

Also, free trade was determined to yield extremely large benefits to all nations, developed and developing alike. That's how I've always seen it as well, and why the anti-globalization freaks confuse me to no end.

As for the worst four... well, I don't think it is any surprise that climate-control programs were the three lowest-ranked projects at this conference. There is little return on investment and they are needlessly expensive. And, although the Conference did not address this, the fact is that we do not have all the facts on why global warming is occuring. As I have said before, to take a 30-year subset of data, compared to the thousands of years of climatic activity, and to extrapolate what the climate "should be" is irresponsible and statistically invalid.

The guest worker program being listed low is interesting as well. These are programs that are very popular in Europe, especially France. The panel said that these programs aren't worth much because of their "tendency to discourage the assimilation of migrants." And with the tension constantly on display in France these days between immigrants and the native French, you have a tangible example. Also, Pres. Bush should look at this, since his ill-advised "amnesty" for illegal aliens is similar to these programs.

Anyway, it's a very interesting report. Check it out.

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