NCPA - National Center for Policy Analysis

GLOBAL WARMING FAILS TO EXCITE ECONOMISTS

June 8, 2004

AIDS and hunger are the world's most urgent problems, while the media attention-getting global warming ranks 10th, according to the Copenhagen Consensus 2004.

Consisting of eight economists, some of them Nobel Prize winners, the Consensus met recently to discuss 10 global issues. The economists read and discussed 17 proposals written by experts in various fields and were charged with the task of solving these problems with an imaginary $50 billion budget.

Among their conclusions:

  • Combating AIDS/HIV, which has killed more than 25 million people worldwide, ranked the most important, garnering $27 billion of imaginary aid.
  • Preventing hunger, particularly among children, ranked second, with the group allotting $12 billion in imaginary aid.
  • Mitigating global warming, however, was a low priority for the economists, and the three solutions dealing with global warming ranked last.

The issue with global warming, according to U.S. economist Vernon Smith, was not the degree of its importance, but to what extent resources should be devoted to it compared to other problems.

The three proposals for global warming were:

  • Implementation of an optimal carbon tax on industries, based on emissions in tons ($170 per ton in 2005, peaking at $1,300 per ton in 2200).
  • Ratification of the Kyoto Treaty by all industrialized and transitioning countries.
  • Implementation of a value-added tax to cut carbon emissions by 90 percent based on emissions in tons ($450 per ton in 2005, peaking at $190 per ton in 2205).

All three proposals were ranked "Bad" by the economists. Indeed, they instead referred to the opposing view that the benefit-cost ratio of the three proposals was not great enough to warrant such severe approaches to the problem.

Sources: Per Bech Thomson, "Economists Rank AIDS, Hunger as World's Worst Worries," Reuters, May 29, 2004; and William R. Cline, "Meeting the Challenge of Global Warming," Center for Global Development and Institute for International Economics, Copenhagen Consensus 2004.

For Copenhagen Consensus report http://www.copenhagenconsensus.com

 

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