Fixing the world — by the numbers....
Jun 22, 2008 11:06:56 GMT -5
Post by Cranky on Jun 22, 2008 11:06:56 GMT -5
Needless to say, as a busineesman and a cold hearted realist, this...warms up my heart....and drives a stake into the "global warming" malarkey as an important world "issue".
Fixing the world — by the numbers
~~~~~~~~~~~
www.thestar.com/News/Ideas/article/447289
~~~~~~~~~~~
Jun 22, 2008 04:30 AM
Andrew Chung
STAFF REPORTER
Cutting our carbon emissions to reduce global warming? Not a top priority. (...
...)
Combating terrorism? Not even on the list of priorities.
Zinc distribution, making school cheaper, and preventing heart attacks? Much more important on a global scale.
If the world decided to fund such efforts, the benefits we'd see would be far greater than what we put into climate change and terrorism, which are central to the anxieties of the First World, and dominate its media coverage.
At least, that's according to some of the world's greatest economic minds.
Suppose $75 billion can be rounded up to invest in making the world better. A staggering sum, yet it's just $11.36 per capita for 6.6 billion humans. So, what could you do to make the most of that money? Ranked in the order of biggest bank for the buck, here's what the number-crunching and Nobel-winning economists of the Copenhagen Consensus say could be accomplished:
1. Vitamin A and zinc supplements for children $60 million
2. Trade targeted to boost incomes in developing countries $0
3. Fortifying diets with sufficient iron and iodine $286 million
4. Expanded immunization for children $1 billion
5. Boost nutrient content of food crops through biofortification $60 million
6. De-worming and other nutrition programs at schools $27 million
7. Lowering the price of schooling $5.4 billion
8. More and better schooling for girls $6 billion
9. Local nutrition education $798 million
10. Support for women's reproductive health and family planning $4 billion
11. Heart disease prevention and treatment $500 million
12. Malaria prevention and treatment $500 million
13. Tuberculosis diagnosis and treatment $419 million
The economists identified 17 other high-yield-for-the-dollar solutions to particular problems. But the theoretical budget – this is an exercise, not implementation – was sufficient to "fund" only the top 13.
The scholars, including Nobel laureates, are part of an exercise in practicality called the Copenhagen Consensus. They've ranked 30 solutions to world policy challenges according to the strict criteria that economics provides: costs versus benefits.
While that might seem like a cold instrument to wield, bereft of human emotion, economists say it's extremely rational and provides an unencumbered view of just what will give us the biggest bang for the buck.
"Emotion is not a good way to make public policy decisions," says Sue Horton, a development economist at Wilfred Laurier University in Waterloo.
After all, the reality is that not everything can be funded. Choices must be made. The Consensus hypothesizes the spending of $75 billion over four years on solutions for those choices.
What would these experts do first with the money? After listening to Horton's passionate arguments at the Consensus conference, which wrapped up at the end of May, the panel agreed that providing zinc, along with vitamin A, to children who lack them in the developing world, should be the highest priority.
"It has immediate and important consequences for improving the well being of poor people around the world," Nobel laureate Douglass North of the Washington University in St. Louis said at the conference, in supporting why it should be priority one.
"With vitamin A and zinc, the main benefit is in terms of averting mortality," Horton explains. "Little kids less than 2 are very susceptible to dying, and vitamin A and zinc have dramatic impacts."
While vitamin A helps them become more resistant to infection, zinc is essential to treat diarrhea, which can lead to dehydration and death.
Spending just $60 million per year on this program would yield more than $1 billion in economic benefits, Horton argues, in the form of better health, fewer deaths and increased future earnings. Put another way, for each dollar spent on this solution, we'd get $17 back.
The money would not fund all children, however. It would simply boost the number in the developing world who got these micronutrients from 72 per cent to 80.
Why not 100 per cent? "Economists would say, `You decide up to what price you're willing to – and have the resources to – spend,'" Horton explains. "You're willing to spend anything up to that to save a life, and after that you say, `No.'"
Horton and her research partners in the exercise, Harold Alderman of the World Bank and Juan Rivera of Mexico's National Institute of Public Health, also lobbied to expand the provision of other micronutrients: iodized salt, which can forestall cognitive deficits and goitre, and iron, which can remedy energy- and productivity-sapping anemia.
With 31 per cent of the developing world's households not consuming iodized salt, the panel placed this at priority number 3. It would cost $286 million but yield $2.7 billion in economic benefits. (One dollar in, $9.50 back.)
It was clear the economists thought that tackling malnutrition was one of the best ways to boost economic potential. Horton also recommended de-worming programs, which improve education because they raise school attendance and allow for increased physical and mental capacity. The panel placed this among the top 10 global priorities.
Economists point out that the economic benefits of better health are enormous. Studies have shown, for example, that it leads to higher adult wages. Longer life expectancy alone can account for 10 to 15 per cent of economic growth.
Even one extra year of longevity can raise GDP per capita by 4 per cent, not to mention compel people to save money for retirement, which in turns leads to more investment and growth.
Thus it follows that economists would find it easy to suggest making a priority of the targeting of diseases, such as malaria, tuberculosis and HIV/AIDS, which plague the developing world much more than the industrialized world.
"For diseases, this is reasonably new turf, to think about how much return you get," says Dr. Prabhat Jha, director of the Centre for Global Health Research at St. Michael's Hospital in Toronto.
Jha, a physician and epidemiologist, was one of three international researchers who proposed solutions for the disease epidemics as they relate to economic welfare. "We did find that you get these huge returns."
For example, childhood immunizations: Expansion of programs could save a million children and come back, economically, 20-fold. Not surprisingly, the Nobel panel ranked this number 4.
Targeting diseases such as tuberculosis, malaria and HIV would also save millions. Interestingly, HIV prevention and treatment are ranked as a lower priority than the others because, Jha explains, HIV treatment is expensive, so the benefit versus cost ratio is not as great.More important than these diseases, from an economic standpoint, is something, Jha says, "the world hasn't been paying attention to." Heart disease kills 13 million people in developing countries each year, more than twice the number caused by malaria, TB and AIDS combined.
This is critical economically because, in poorer countries, heart disease affects those aged 30 to 69 – "the peak ages where people are running households and making money and contributing to the economy."
Jha says giving people who show signs of heart disease a trifecta of cheap drugs to reduce blood pressure, cholesterol and thin the blood, would pay off 20-fold. So would aggressive tobacco control.
The panel agreed. It placed heart disease high on the list of global priorities – number 11 – ahead of malaria and tuberculosis, and HIV.
Also figuring high on the list is education. The economists noted that rather than paying to build more schools without knowing if parents will send their children to them, a benefit-cost analysis would dictate lowering the cost of schooling instead.
Tuition and school fees chew up a significant portion of a poor families' income. In Uganda, eliminating primary school fees reduced costs by 60 per cent, or $16 per child, and led to a 60 per cent increase in enrolment.
The downside, the economists acknowledge, "is much larger class sizes, the effect of which is unknown."
Through the economist's lens, everything has a cost and a benefit that can be measured, a perspective that can lead to some blunt assessments.
On education, for instance, the economists who researched the issue reasoned that it would be cheaper to get children who have dropped out of primary education to complete it (about 23 per cent of the world's poor children drop out by Grade 5) "than to get children who have never attended school to become literate."
The economists admit that, in this context, human lives are monetized – always a touchy subject.
Horton says it's a common criticism: "Particularly with health and nutrition, you're putting a dollar value on human life."
The Consensus exercise even stipulated a value: the equivalent of $30,000 per death averted in poor nations. (The number is much higher in advanced nations.)
What this means is that while the rest of us might shy away from addressing when saving a life is or is not "worth" it, economists will be explicit about it. This is what the ranking of global priorities is all about.
Economists, Horton declares, "don't like to discuss things in a fuzzy way. What economists say first, is, `Let's provide this information as to how things should be ranked. And if you want to pick something where the benefits are smaller for the same cost, let's have a good justification for it.'
"You could say, `This is a less good solution, but it's really important because it reaches women or indigenous people,' but let's make the arguments really transparent."
Benefit-cost analyses, free from emotion, can also lead to some controversial results.
For instance, the Nobel panel didn't place solutions to terrorism on their list at all. Economists say the costs incurred in trying to stop terrorists are simply far higher than the benefits.
Another issue that is top of mind for many is global warming. But not for economists. Here again, the costs to mitigate climate change outweigh the benefits. Besides, those benefits won't be accrued until well into the future, a strike against any solution.
"Think about it rationally," Horton says. "Because our impacts on the environment are so slow to occur, many of us aren't as avid about undertaking them as we ought to be."
The panel ranked it at the bottom of the list.
Chris Green, who teaches a course on the economics of climate change at McGill University, has warned in his work that tackling climate change will be much more costly than most of us think.
Green, who participated in the Consensus, says that while climate change is an extremely serious long-term problem, "My view is that we don't have the means to deal with it, in any meaningful way, without major technology breakthroughs." He wants to see an "energy technology race" started.
The panel agreed, and placed the development of low-carbon technologies, whatever they may be, at number 14 on the list.
Economists know that their work can appear as nothing more than cold calculations. Even Green concedes, "I'm not sure you want to frame policy directly on" benefit-cost ratios. And Jha warns of listening to expert panels. "They're only right half the time," he cautions.
If anything, the Copenhagen Consensus exercise helps us think differently about the problems of the world: That is, what we may think is important may not have the biggest impact on its most vulnerable people.
.
Fixing the world — by the numbers
~~~~~~~~~~~
www.thestar.com/News/Ideas/article/447289
~~~~~~~~~~~
Jun 22, 2008 04:30 AM
Andrew Chung
STAFF REPORTER
Cutting our carbon emissions to reduce global warming? Not a top priority. (...
...)Combating terrorism? Not even on the list of priorities.
Zinc distribution, making school cheaper, and preventing heart attacks? Much more important on a global scale.
If the world decided to fund such efforts, the benefits we'd see would be far greater than what we put into climate change and terrorism, which are central to the anxieties of the First World, and dominate its media coverage.
At least, that's according to some of the world's greatest economic minds.
Suppose $75 billion can be rounded up to invest in making the world better. A staggering sum, yet it's just $11.36 per capita for 6.6 billion humans. So, what could you do to make the most of that money? Ranked in the order of biggest bank for the buck, here's what the number-crunching and Nobel-winning economists of the Copenhagen Consensus say could be accomplished:
1. Vitamin A and zinc supplements for children $60 million
2. Trade targeted to boost incomes in developing countries $0
3. Fortifying diets with sufficient iron and iodine $286 million
4. Expanded immunization for children $1 billion
5. Boost nutrient content of food crops through biofortification $60 million
6. De-worming and other nutrition programs at schools $27 million
7. Lowering the price of schooling $5.4 billion
8. More and better schooling for girls $6 billion
9. Local nutrition education $798 million
10. Support for women's reproductive health and family planning $4 billion
11. Heart disease prevention and treatment $500 million
12. Malaria prevention and treatment $500 million
13. Tuberculosis diagnosis and treatment $419 million
The economists identified 17 other high-yield-for-the-dollar solutions to particular problems. But the theoretical budget – this is an exercise, not implementation – was sufficient to "fund" only the top 13.
The scholars, including Nobel laureates, are part of an exercise in practicality called the Copenhagen Consensus. They've ranked 30 solutions to world policy challenges according to the strict criteria that economics provides: costs versus benefits.
While that might seem like a cold instrument to wield, bereft of human emotion, economists say it's extremely rational and provides an unencumbered view of just what will give us the biggest bang for the buck.
"Emotion is not a good way to make public policy decisions," says Sue Horton, a development economist at Wilfred Laurier University in Waterloo.
After all, the reality is that not everything can be funded. Choices must be made. The Consensus hypothesizes the spending of $75 billion over four years on solutions for those choices.
What would these experts do first with the money? After listening to Horton's passionate arguments at the Consensus conference, which wrapped up at the end of May, the panel agreed that providing zinc, along with vitamin A, to children who lack them in the developing world, should be the highest priority.
"It has immediate and important consequences for improving the well being of poor people around the world," Nobel laureate Douglass North of the Washington University in St. Louis said at the conference, in supporting why it should be priority one.
"With vitamin A and zinc, the main benefit is in terms of averting mortality," Horton explains. "Little kids less than 2 are very susceptible to dying, and vitamin A and zinc have dramatic impacts."
While vitamin A helps them become more resistant to infection, zinc is essential to treat diarrhea, which can lead to dehydration and death.
Spending just $60 million per year on this program would yield more than $1 billion in economic benefits, Horton argues, in the form of better health, fewer deaths and increased future earnings. Put another way, for each dollar spent on this solution, we'd get $17 back.
The money would not fund all children, however. It would simply boost the number in the developing world who got these micronutrients from 72 per cent to 80.
Why not 100 per cent? "Economists would say, `You decide up to what price you're willing to – and have the resources to – spend,'" Horton explains. "You're willing to spend anything up to that to save a life, and after that you say, `No.'"
Horton and her research partners in the exercise, Harold Alderman of the World Bank and Juan Rivera of Mexico's National Institute of Public Health, also lobbied to expand the provision of other micronutrients: iodized salt, which can forestall cognitive deficits and goitre, and iron, which can remedy energy- and productivity-sapping anemia.
With 31 per cent of the developing world's households not consuming iodized salt, the panel placed this at priority number 3. It would cost $286 million but yield $2.7 billion in economic benefits. (One dollar in, $9.50 back.)
It was clear the economists thought that tackling malnutrition was one of the best ways to boost economic potential. Horton also recommended de-worming programs, which improve education because they raise school attendance and allow for increased physical and mental capacity. The panel placed this among the top 10 global priorities.
Economists point out that the economic benefits of better health are enormous. Studies have shown, for example, that it leads to higher adult wages. Longer life expectancy alone can account for 10 to 15 per cent of economic growth.
Even one extra year of longevity can raise GDP per capita by 4 per cent, not to mention compel people to save money for retirement, which in turns leads to more investment and growth.
Thus it follows that economists would find it easy to suggest making a priority of the targeting of diseases, such as malaria, tuberculosis and HIV/AIDS, which plague the developing world much more than the industrialized world.
"For diseases, this is reasonably new turf, to think about how much return you get," says Dr. Prabhat Jha, director of the Centre for Global Health Research at St. Michael's Hospital in Toronto.
Jha, a physician and epidemiologist, was one of three international researchers who proposed solutions for the disease epidemics as they relate to economic welfare. "We did find that you get these huge returns."
For example, childhood immunizations: Expansion of programs could save a million children and come back, economically, 20-fold. Not surprisingly, the Nobel panel ranked this number 4.
Targeting diseases such as tuberculosis, malaria and HIV would also save millions. Interestingly, HIV prevention and treatment are ranked as a lower priority than the others because, Jha explains, HIV treatment is expensive, so the benefit versus cost ratio is not as great.More important than these diseases, from an economic standpoint, is something, Jha says, "the world hasn't been paying attention to." Heart disease kills 13 million people in developing countries each year, more than twice the number caused by malaria, TB and AIDS combined.
This is critical economically because, in poorer countries, heart disease affects those aged 30 to 69 – "the peak ages where people are running households and making money and contributing to the economy."
Jha says giving people who show signs of heart disease a trifecta of cheap drugs to reduce blood pressure, cholesterol and thin the blood, would pay off 20-fold. So would aggressive tobacco control.
The panel agreed. It placed heart disease high on the list of global priorities – number 11 – ahead of malaria and tuberculosis, and HIV.
Also figuring high on the list is education. The economists noted that rather than paying to build more schools without knowing if parents will send their children to them, a benefit-cost analysis would dictate lowering the cost of schooling instead.
Tuition and school fees chew up a significant portion of a poor families' income. In Uganda, eliminating primary school fees reduced costs by 60 per cent, or $16 per child, and led to a 60 per cent increase in enrolment.
The downside, the economists acknowledge, "is much larger class sizes, the effect of which is unknown."
Through the economist's lens, everything has a cost and a benefit that can be measured, a perspective that can lead to some blunt assessments.
On education, for instance, the economists who researched the issue reasoned that it would be cheaper to get children who have dropped out of primary education to complete it (about 23 per cent of the world's poor children drop out by Grade 5) "than to get children who have never attended school to become literate."
The economists admit that, in this context, human lives are monetized – always a touchy subject.
Horton says it's a common criticism: "Particularly with health and nutrition, you're putting a dollar value on human life."
The Consensus exercise even stipulated a value: the equivalent of $30,000 per death averted in poor nations. (The number is much higher in advanced nations.)
What this means is that while the rest of us might shy away from addressing when saving a life is or is not "worth" it, economists will be explicit about it. This is what the ranking of global priorities is all about.
Economists, Horton declares, "don't like to discuss things in a fuzzy way. What economists say first, is, `Let's provide this information as to how things should be ranked. And if you want to pick something where the benefits are smaller for the same cost, let's have a good justification for it.'
"You could say, `This is a less good solution, but it's really important because it reaches women or indigenous people,' but let's make the arguments really transparent."
Benefit-cost analyses, free from emotion, can also lead to some controversial results.
For instance, the Nobel panel didn't place solutions to terrorism on their list at all. Economists say the costs incurred in trying to stop terrorists are simply far higher than the benefits.
Another issue that is top of mind for many is global warming. But not for economists. Here again, the costs to mitigate climate change outweigh the benefits. Besides, those benefits won't be accrued until well into the future, a strike against any solution.
"Think about it rationally," Horton says. "Because our impacts on the environment are so slow to occur, many of us aren't as avid about undertaking them as we ought to be."
The panel ranked it at the bottom of the list.
Chris Green, who teaches a course on the economics of climate change at McGill University, has warned in his work that tackling climate change will be much more costly than most of us think.
Green, who participated in the Consensus, says that while climate change is an extremely serious long-term problem, "My view is that we don't have the means to deal with it, in any meaningful way, without major technology breakthroughs." He wants to see an "energy technology race" started.
The panel agreed, and placed the development of low-carbon technologies, whatever they may be, at number 14 on the list.
Economists know that their work can appear as nothing more than cold calculations. Even Green concedes, "I'm not sure you want to frame policy directly on" benefit-cost ratios. And Jha warns of listening to expert panels. "They're only right half the time," he cautions.
If anything, the Copenhagen Consensus exercise helps us think differently about the problems of the world: That is, what we may think is important may not have the biggest impact on its most vulnerable people.
.
