A few comments to
"Copenhagen Consensus 2012"
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The conference

The third "Copenhagen Consensus" conference was held in May 2012 in Copenhagen.
It is presented on the official website here.

The set-up was very much like in the two preceding conferences in 2004 and 2008. The Copenhagen Consensus economists were asked how the world should best spend $75 billion (58 billion euros) over a four-year period, which Lomborg says is only 15 percent more than the global aid spending today.

As usually, a list of ten major issues facing the planet was defined in advance. For Copenhagen Consensus 2012 the ten issues were: Armed conflict, Biodiversity, Chronic Disease, Climate Change, Education, Hunger and Malnutrition, Infectious Disease, Natural Disasters, Population Growth, Water and Sanitation.

Following the same format as past Copenhagen Consensus projects, first, the Center commissioned research papers on the costs and benefits of solutions to ten different global challenges. Two sets of papers - 'Challenge Papers' and 'Perspective Papers' - were commissioned, to ensure that there was a range of expert points-of-view. An expert panel of five economists - including to a great extent the same Nobel laureates as previously - examined the research papers and met with the lead authors in May 2012. After deliberations, the expert panel created a prioritised list of solutions to the ten challenges.  As previously, the Center expects that this list will be utilized as an input by donors, governments and philanthropists.

The resulting list of prioritised solutions was announced on May 14th. The list can be seen here:
Outcome statement from Copenhagen Consensus 2012

The alleged prioritisation method
In the voting of the expert panel, 16 investments were found worthy of investment, given the budget restraints. 14 other investments were also evaluated, but were found less favourable and fell outside of what could be contained within the budget.

According to the official outcome documents, the priority list shows the most cost-effective investments. Thus, we are given the impression that the top priority is the one giving the highest return rate of each dollar invested, whereas all the following investments give lower and lower return rates, as we descend down thorugh the list.

In the paragraph titled `methodology´, we read: "In ordering the proposals, the panel was guided predominantly by consideration of economic costs and benefits. The panel acknowledged the difficulties that cost-benefit analysis must overcome  . . . but agreed that the cost-benefit approach was . . . indispensable. In setting priorities, the panel took account of the strengths and weaknesses of the specific cost-benefit appraisals under review, and gave weight both to the institutional preconditions for success and to the demands of ethical or humanitarian urgency. . . "

Strange prioritisation
All this sounds sensible, but when one studies the actual list of priorities, it becomes completely obscure how the prioritisation was actually made.

The top priority is a project called `Bundled micronutrient interventions to fight hunger and improve education´. Here, it is said, each dollar spent has at least a $30 payoff. And a related project, improving agricultural productivity, is said by Lomborg to give a payoff of about $16 per dollar spent.

Some other highly prioritised investments are deworming of schoolchildren and expanding tuberculoses treatment, which are claimed to have return rates of 35 and 20, respectively.

Further down the list, we find a very controversial project, that is geo-engineering to reduce the intensity of incoming solar radiation to counteract global warming. According to a background paper, such investments would give a return rate of about 1,000. In spite of this enormous return rate, this is given moderate priority, apparently because it is deemed rather uncertain if this will actually work as intended.

The lowest ranking accepted project, project no. 16, is called "Borehole and public hand pump intervention". This has an estimated benefit-cost-ratio of loess than 3.4.

Next, we come to priority no. 17, the highest ranking not-accepted project. This is  "Increased funding for green energy research and development". According to the authors of the background paper, this has benefit-cost-ratios of 10 or more if the time horizon is slightly more than 1 decade.  It is therefore a bit strange that this is placed below a project with a clearly less favourable benefit-cost-ratio.

It is peculiar that the top-ranking measure to do something about global warming (apart from geo-engineering) is placed as the uppermost of the rejected projects. Considering that the ranking in general is rather subjective and not the result of a strict ranking in order of cost-benefit-ratios, one may feel a suspicion that this placement on the list is a deliberate provocation.

Priority no. 18 is very remarkable. This is reducing population growth by increasing the availability of family planning. According to the background paper by Hans-Peter Kohler, each dollar spent on this issue will give benefits of $90 to $150. This makes sense to most environmentalists: By reducing population growth, especially in Subsaharan Africa, we will alleviate nearly all other problems in the region. Now, with this large benefit-cost-ratio, this project should have much higher priority than the `Bundled micronutrient interventions´. So, why is that not so? When we look in the outcome statement, we find no explanation. There is only a short, very general text which tells nothing concrete about this subject. So improved family planning is thrown out of the list of approved projects without any explanation. The reader is left to wonder for himself. Maybe we see the influence of strong religious American organisations here?

So, contrary to the impression given by Lomborg, the priority list is not an objective list based mainly on benefit-cost-ratios.