A conversation with the Copenhagen Consensus Center on December 16, 2013

Participants

Note: This set of notes gives an overview of the major points made by Bjorn Lomborg.

Summary

Good Ventures spoke to Bjorn Lomborg about the Copenhagen Consensus Center's past work and its new initiative to use cost-benefit analysis to prioritize the post-2015 UN development goals.

Past work of the Copenhagen Consensus Center

The Copenhagen Consensus recruits a team of about 60 economists every four years to prioritize projects to improve global welfare based on their cost-benefit ratios. For example, the top three interventions from the 2012 expert consensus were micronutrient interventions, subsidies for malaria combination therapies, and expanded childhood immunization. The work is designed to inform both public spending, including developed world aid and developing world government spending, and private philanthropy.

In 2007, the Center conducted a two-day Copenhagen Consensus meeting with 23 UN ambassadors, including ambassadors from China, India, and the United States. Economists recruited by the Center and UN economists spoke to the ambassadors about priorities for cost-effective interventions.

Work on the post-2015 UN development goals

Currently, the Center is using cost-benefit analysis to prioritize among the post-2015 UN development goals. So far, about 1,400 different goals have been proposed, and the goals may influence $700 billion of funding.

Selecting the best goals

The Center will recruit economists who are experts in promising interventions to assess potential goals in their areas of expertise. For example, it will ask a group of nutrition economists to generate their preferred goals and to consider high-profile goals proposed by others. Each group of experts will consider questions such as whom the goals should target. For example, goals could be targeted to reach the poorest people or to reach only children. They will also consider what percentage of the population a goal should aim to reach. For example, a goal to make people well-nourished could aim to reach 80%, 90%, or 100% of a population. There is a tendency for policymakers to suggest that goals should reach 100% of a population, but this usually does not make economic sense because the last few percent are the hardest to reach and thus not very cost-effective. Each group of experts will select about 3-5 goals to compare in detail, surveying the literature to determine the costs and benefits of each.

Other groups of economists will do similar analyses in other issue areas, and all estimates will be converted into dollar values by using common definitions of the value of a human life, the discount rate, and other parameters. Then, UN agencies, businesses, and an independent group of economists will evaluate each estimate and explicate the range of uncertainty in each estimate by considering how it would change under several reasonable sets of assumptions.

The analyses attempt to take into account the likelihood that interventions could be scaled up if more money were allocated for them. However, when setting goals on the time horizon of decades, it is difficult to predict whether the infrastructure and organizations will exist to make it possible to scale up a particular intervention. Cost-benefit analysis attempts to account for this issue by discounting the expected benefits of a successful intervention for the chance that it will be difficult to replicate. For example, if every second replication of an intervention has failed in the existing literature, the analysis will likely assume that the intervention will fail about half of the time in the future.

Engaging with decision makers

The Center plans to engage with decision makers about its research. Dr. Lomborg has already presented to the UN Open Working Group on Sustainable Development Goals.

The Center aims to complete cost-benefit analyses of about 50 of the most important goals by the middle of 2014. Then, it plans to visit 20-40 UN missions representing large countries in New York City to conduct private priority-setting exercises with the UN ambassadors and other staff who will be involved in the development goals negotiations. The Center has done these exercises with a wide variety of people in the past, from bankers to high school students, and has found that they inspire participants to think more in terms of cost-effectiveness.