How Pressing a Problem is Global Warming?

by Don Boudreaux on June 7, 2008

in Environment, Myths and Fallacies, Reality Is Not Optional

The important work of Bjorn Lomborg — the Skeptical Environmentalist and organizer of the Copenhagen Consensus Center — is the subject of this insightful essay in today’s edition of the Wall Street Journal.  Here’s a slice:

Even as the U.S. Senate debates a vast new tax and
spend regime in the name of fighting climate change, a more instructive
argument was taking place in Copenhagen, Denmark. Some of the world’s
leading economists met last week to decide how to do the most good in a
world of finite resources.

Scarcity is a core economic concept, though
politicians and even many economists prefer to ignore it. There isn’t
an unlimited amount of money to be spent on every problem, so choices
have to be made. The question addressed by the Copenhagen Consensus
Center is what investments would do the most good for the most people.
The center’s blue-ribbon panel of economists, including five Nobel
laureates, weighed more than 40 proposals to improve the world by
spending a total of $75 billion over the next four years.

What would do the most good most economically? Supplements of vitamin A and zinc for malnourished children.

Number two? A successful outcome to the Doha Round of global free-trade talks. (Someone please tell Barack Obama.)

Global warming mitigation? It ranked 30th, or last,
right behind global warming mitigation research and development.
(Someone please tell John McCain.) The nearby table lists other
rankings.

"It’s true that trade doesn’t immediately save lives,"
explains Bjorn Lomborg, the political scientist who heads the
Copenhagen Consensus Center. "But it’s proven that when people have
more money" – as tends to be the case when trade barriers fall – "they
improve their health, their education and so on." The resulting
prosperity reduces such problems as malnutrition and disease, while
improving education. All three of those ranked high on the priority
list.

The benefits of freer trade were estimated in a paper
presented by Professors Kym Anderson and Alan Winters. They found that
a successful Doha Round could generate up to $113 trillion in new
wealth during the 21st century, at a cost of $420 billion or less from
inefficient industries going bust. If you like ratios, that’s a return
of $269 for every $1 of cost. A less conservative projection puts the
gains three times higher. More than 80% of this global windfall would
go to the world’s poorest countries.

Vernon Smith, Professor Emeritus of Economics at GMU (and 2002 co-winner of the Nobe Prize in Economic Science), is among the scholars active in Prof. Lomborg’s important enterprise.

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