14 July, 2014

Lomborg and Realistic Optimism

Just because it sounds good …

THE world has generally become a much better place during the last half-century. Sceptics will scoff, but the numbers don’t lie. The task now is to make the world even better.
In 1960, 20 million children under the age of five died. In 2011, with 40 per cent more children, deaths had declined by two-thirds, to 6.9 million.
In 1970, only 5 per cent of infants were vaccinated against measles, tetanus, whooping cough, diphtheria and polio. By 2000, the proportion was 85 per cent, saving about three million lives annually. Each year, these vaccines alone saved more people than world peace would have saved in the 20th century.
Air pollution, the world’s biggest environmental problem, has declined dramatically. Though there has been a small uptick in outdoor air pollution, the much larger problem of indoor air pollution — cooking and keeping warm with open, polluting fires — has declined precipitously. Since 1960, the risk of dying from all types of air pollution has been more than halved.
In 1962, 41 per cent of the world’s children were not in school — today that number is below 10 per cent. Worldwide ­literacy has risen from one-third to two-thirds.
Likewise, the number of those living in poverty worldwide has dropped from 43 per cent to less than 18 per cent since 1981. During that period, more than three billion people joined the ranks of the non-poor.
There are many reasons for this progress — not least rapid economic development, espec­ially in China. But there has also been a concerted international ­effort, reflected in the Millennium Development Goals, which the UN adopted in 2000 to make the world a better place by 2015.
The MDGs set 18 clear and mostly achievable targets in eight areas, including poverty and hunger, gender equality, education, and child and maternal health. In the period since 2000, development aid worldwide reached about $900 billion, of which perhaps $200bn was due to the MDGs.
The UN is now contemplating how to extend this target-setting process from 2015 to 2030. If the successor scheme, the Sustainable Development Goals, has a similar impact, it could ­determine the allocation of upwards of $700bn.
Obviously, this means everyone wants their favourite issue on the agenda, and more than a thousand targets have been proposed, which is tantamount to having no priorities at all. It would be useful, therefore, to get a sense of what really works, not just what sounds good. As Julie Bishop rightly points out, development dollars need to be spent “to the greatest effect”. That is why she has welcomed the new project from my think tank, the Copenhagen Consensus.
Here we have engaged with 57 teams of world-class economists to investigate 19 major areas and about 50 targets. Within each area we ask how much each target will cost and how much good it will do. This information will be ready by the end of this year, well before the UN decides on its SDGs late next year.
But negotiations have already begun, and the UN would like some information right now. So we asked our economists to give a quick assessment on 200 of the proposed targets. Some targets, such as getting broad access to family planning, are phenomenally good. That is because contraception is mostly inexpensive and can help both ­individuals and society. The bene­fits can rise as high as $150 for every $1 spent.
Similarly, we should focus on at least halving malnutrition, as there is robust evidence proper nutrition for young children leads to a lifetime of large benefits — better brain development, improved academic performance and higher productivity as adults. For every $1 spent, future generations will receive almost $60 in benefits.
But the UN draft says we should “end malnutrition”, and the economists warn that, while such an absolute goal sounds ­alluring, it is probably both implausibly optimistic and inefficient. We cannot achieve it, and even if we could the resources to help the last hungry person would be much better spent elsewhere.
Likewise, the UN would like to end HIV, malaria and tuberculosis. And, while reducing malaria and TB significantly is a very good deal, it is likely that eradication is unrealistic and uneconomical.
At the other end of the scale, some of the UN’s proposed targets are entirely unrealistic, like promising work to everyone. We do not know how to do that, and some low level of unemployment is necessary to have a functioning labour market from which employers can recruit. Instead, the economists suggest focusing on reducing barriers to employment, particularly for women.
Other poor targets simply cost more than the benefit they provide. Doubling the share of ­renewable energy by 2030 sounds good, but is an expensive way to cut just a little CO2. Instead, we should focus on getting more ­energy to poor people, a proven way to increase growth and TO reduce poverty. And to cut CO2 emissions we should phase out the substantial fossil-fuel subsidies that riddle much of the developing world, leading to wasteful consumption and straining government budgets.
The ultimate decision about which targets to set for the coming 15 years is a complex and deeply political discussion, and advice from economists will not magically resolve all complications. But providing evidence of what works really well and what doesn’t makes it more likely that good targets will be selected — and poorer ones left out.
Realistically, this approach may help to exclude only a few poor targets, or even just one, and it might generate enough tailwind to put just one additional good goal on to the final list.
But because the world is likely to spend $700bn on the SDGs, even a small change can do tens or even hundreds of billions of dollars’ worth of good. That is why helping the UN narrow its priorities to include the best targets could be the most important thing any of us can do this decade.
Bjorn Lomborg is adjunct professor at Copenhagen Consensus Centre.
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