28 May 2015

A thought on Bjorn Lomborg

In a comment to this post on climate change, David Foster asks if I agree with Bjorn Lomborg's method of using cost-benefit analysis to evaluate and rank "priorities" for government action.

(The relevant fact is that Lomborg's "consensus" methods tend to prioritize vitamin supplements and water supplies over action on climate change. I was paid as an outside reviewer at Lomborg's Copenhagen Consensus Center and found their work to be valuable and credible.)

I have three observations to offer on this "controversy"


Second, people have different opinions on priorities. Some rich people worry about climate change because they play a big role in its arrival and it represents -- relative to their daily lives -- a pretty scary future. Other rich people don't want to interrupt their party for anything as crass as consuming less "for the planet (or the poor)". These two groups have divided opinions on Bjorn's research.

Third, I agree that we need to apply cost-benefit analysis to government policies -- such as the $5.6 trillion (!) cost of energy subsidies -- but we also need to order those policies by priority and politics.

Over six years ago, I said "divide [Lomborg's] list into projects the developed world should address -- climate change -- and the developing world should address -- water sanitation." This matches Bjorn's findings in terms of actions to help humanity, but I would apply "lexicographic preferences" to his list, i.e., divide it into two lists of priorities for poor and rich governments (rather than focussing on foreign-aid priorities).

Poorer governments need more "development" -- not more tanks, vanity stadiums, or corrupt cronies chopping down forests. They certainly do not need "low carbon programs" when people cannot even drink the water. Governments of rich countries, OTOH, can raise their sights by aiming at climate change (both mitigation and adaptation), with the goal of (1) "turning down the heat" in terms of carbon consumption (recall that BC's revenue neutral carbon tax has accomplished a lot; the EU's cap and trade is slowly coming back to life) and (2) developing new policies and technologies that LDCs can later adapt.

Bottom Line: Cost-benefit analysis is great when you use it in the right context.

1 comment:

David Foster said...

Thanks David,

It is fascinating how many seemingly rational people (possibly even including us) demand a recount when their own priorities are not selected. Many who damn the lunacy of Climate Change Deniers are often quick to rely on unfounded rumors to criticize the use of GMOs in developing countries and recent studies suggest that highly educated parents are often more likely to avoid vaccinating their kids than their less educated brethren. "Science is great when it supports my own biases."

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