Some time has passed since I commented (i.e., criticised) on Bjørn Lomborg’s writings for the last time. His most recent activity (an article on Project Syndicate) is, however, inviting for another round of critique. Actually, there is not much newness to be found in this piece by Lomborg. But because it kind of summarises his views, it may be worth a brief investigation.
In The Smartest Ways to Save the World Lomborg presents results of the latest project of his Copenhagen Consensus Center. The pattern is not new: Lomborg invited some 50 economists to make a cost-benefit analysis of about 40 “world-saving” projects – ranging from fighting AIDS to tackling climate change. These analyses were then presented to a panel of 5 acknowledged economists (including Thomas Schelling, Robert Mundell, Finn Kydland and Vernon Smith, Economics “Nobel Prize” laureates in 2005, 1999, 2004 and 2002, respectively) who were asked to judge, given an imaginary budget of $75 billion over four years, which of the projects they would recommend for implementation.
Among the projects the panel found to deliver most (in monetary terms) per dollar of input there were: the fight against malnutrition (mainly micronutrient provision), support for the Global Fund‘s Affordable Medicines Facility-malaria’s fight against malaria, deworming of school children, investment in R&D of HIV/AIDS vaccines, provision of vaccines against Hepatitis B and low-cost drugs for acute heart attacks to those living in poor countries, and investments into agriculture-related R&D. Traditionally (for Lomborg), tackling climate change was found to be less “profitable”:
When it comes to climate change, the experts [none of them dealing professionally with climate economics – ZG] recommend spending a small amount – roughly $1 billion – to investigate the feasibility of cooling the planet through geo-engineering options.
Apparently, the panel believed investments in early-warning systems for natural disasters to be much more important/worth undertaking than tackling one of their causes (and a major factor in their likely becoming worse in future).
There are at least three general problems with Lomborg’s project results. First, they seemingly blindly rely on cost-benefit analysis. Secondly, they do not at all address structural causes underlying the challenges analysed. And thirdly, the Copenhagen Consensus Center appears to be unable to learn from its previous mistakes regarding climate change.
My first criticism regards the unqualified adoption of cost-benefit analysis (CBA) in ranking the “world-saving” projects. Lomborg is probably right in pointing out that we have only limited resources worldwide (his $75 billion would mean an increase of about 12% above current global ODA level) and that we have to balance the alternatives. However, this does not mean (as Lomborg & Co. obviously suggest) that we can easily judge all these projects and weigh them against each other in some objective way, implicating in this case monetary CBA. In fact, most of the goals in hand cannot be easily quantified, not to mention the possibility to do this in an “objective” way. Such valuations (of ecosystem services, human lives etc.) always involve value judgements and are not uncontroversial. For example, in evaluating the worth of a saved human life, the economists who worked for the Copenhagen Consensus Center apparently applied the human capital approach, as can be seen in this quotation:
Studies show that, decades down the line, these children [provided with micronutrients – ZG] would be more productive, make more money, have fewer kids, and begin a virtuous circle of dramatic development.
However, this method is all but controversial and highly criticised by many economists. It is just one example of the many problematic valuations that had to be made for Lomborg’s project. They are per definitionem arbitrary (since such things as human lives or ecosystem services do not have market prices – their “prices” must be indirectly imputed) and this fact should be borne in mind when one contemplates claims similar to Lomborg’s. (For those interested in the issue I highly recommend the book Priceless: On Knowing the Price of Everything and the Value of Nothing by Frank Ackerman and Lisa Heinzerling who provide a fairly comprehensive account of the problems in applying CBA to environmental and health questions.)
The second point of my critique is that the policy proposals mentioned by Lomborg completely fail to address structural issues – especially in the context of hunger and malnutrition, but also health issues. Along with a “biophysical” or “natural” component, hunger and malnutrition have a common structural-political set of causes. These are manifold and range from agricultural subsidies especially in the EU and US; so-called land-grabbing activities facilitated by a lack of recognition of traditional property rights; food wastage in rich societies; agricultural land lost to biofuel production; to speculation in commodity markets. All of them have a profound impact on food supply across the world. While the approaches proposed by Lomborg’s Copenhagen Consensus 2012 are important, they won’t sustainably solve the problem if its structural causes won’t be addressed as well.
And, last but not least, there is the issue of climate change. I must admit that I have no idea what the informational basis is from which Lomborg’s experts panel is able to draw the startling conclusion that there is no hurry in addressing climate change. Almost all other commentators, from environmentalists to the IEA (sic!), agree that we are running fastly toward the brink of the abyss of catastrophic climate change. Both climate science and climate economics have provided multiple arguments in favour of heavy investments in climate protection – which should be started as soon as possible. Meanwhile, Lomborg’s experts dismiss the climate change issue as obviously not so important and limit their recommendations in this respect to a relatively small R&D programme in geo-engineering – exactly the “solution” to climate change that is the most controversial one. Not to mention the vastly negative influence of climate change on numerous other challenges from Lomborg’s list (agriculture and thus hunger; natural disasters; likely also malaria and other health issues…).
What can we conclude from the above discussion? Whereas Bjørn Lomborg’s project team has identified a number of humanity’s challenges that indeed belong to the most pressing ones, their analysis was more than problematic. First of all, the method used to assess the relative relevance of the various challenges (i.e., cost-benefit analysis) is critical and at least partly not suited for this kind of analysis. It shouldn’t therefore surprise anybody that while some of the conclusions drawn on that basis are right, others are not. Furthermore, in the field of hunger and malnutrition particularly, the participants of the Copenhagen Consensus project proposed only treatments to symptoms, without addressing the structural causes of the analysed problems. And, last but not least, there is the issue that will stick to Lomborg’s name for a long time to come – his treatment of climate change. Although more than once his mistakes in the analysis of this particular challenge and in the assessment of its likely consequences were pointed out, he apparently refuses to acknowledge them. The consequence of this blindness is that his projects one after another downplay the severity of perhaps the greatest challenge in humanity’s history, while claiming that they provide hints as to how save the world in a “smart way”.