‘Global warming is not our most urgent priority’
James Delingpole
Wednesday, 11th June 2008
Bjørn Lomborg, the controversial Danish economist, tells James Delingpole that it is better to spend our limited funds on saving lives than on saving the planet
Gosh, I do hope Bjørn Lomborg doesn’t think I was trying to pick him up. I’ve only just learned from his Wikipedia entry that he’s ‘openly gay’ which, with hindsight, probably made my dogged insistence that we conduct our interview in his cramped hotel bedroom look like a cheap come-on. Not to mention the way I sat there throughout, mesmerised and sometimes lost for words under the gaze of the handsome, trim 43-year-old blond’s intensely sincere Danish blue eyes which never leave yours for one second.
But it’s OK, Bjørn. You were safe all along, I promise. The reason for my awe is quite simply that I believe you are one of the heroes of our age. You’ve been called the antichrist, been vilified ad hominem in numerous scientific journals, even had custard pies thrown in your face (at Borders bookshop, Oxford, by an eco-activist), but still you’ve stuck to your guns and continued bravely to reiterate what for a time seemed almost unsayable.
Lomborg’s basic argument — as laid out in his bestsellers, The Skeptical Environmentalist and Cool It! — is that the world isn’t in nearly as bad a mess as the eco-doomsayers claim it is. And before we do anything too drastic to try to make things better, we ought first to ascertain what its most pressing problems are, rather than throw good money after hopeless causes.
Lomborg’s latest venture is a body he has founded called the Copenhagen Consensus. Funded mainly by the Danish government, this research panel comprises 50 leading economists, including five Nobel Laureates, and has spent two years applying cost benefit analysis methods to a list of global challenges — disease, pollution, conflict, terrorism, climate change, water and so on.
Its conclusions are hardly likely to win Lomborg new fans in the eco movement, for global warming comes so far down the list of urgent priorities that it doesn’t make the top ten. Far better to spend our limited pool of development aid money, say the economists, on schemes like micronutrient supplements (vitamin A and zinc) for malnourished children. For an annual outlay of only $60 million this would result in yearly benefits (through improved health, fewer deaths, increased earnings) worth more than $1 billion.
Also high on the list are unglamorous things like expanded immunisation coverage for children; deworming programmes in Third World schools; and community-based nutrition promotion. Number two on the recommended list is the — highly unlikely given resistance from the US and the EU — implementation of the Doha development agenda. Ending the trade tariffs, in other words, which are immeasurably to the developing world’s disadvantage.
‘It’s true that in the battle between exciting problems and boring problems we are defenders of the boring problems,’ agrees Lomborg, when I suggest that polar bears on melting ice caps tug the heartstrings far more effectively than flyblown African urchins. ‘Our uphill task is to try to show that problems involving the greatest pictures and the cutest animals are not necessarily the most pressing issues.’
This is the sort of dull pragmatism that so often gets Lomborg into trouble. People will read him saying that the threat to polar bears has been somewhat exaggerated, given that their global population has increased fivefold since the 1960s, and they’ll think: ‘Heartless, evil Bush shill, probably in the pay of Big Oil.’ Whereas all Lomborg is actually saying in his remorselessly logical, Danish statistics professor’s way, is: ‘Let’s take emotion and hysteria and fluffy white fur out of the argument and try to seek the objective truth.’
Ah, but what do economists know anyway? Aren’t decisions regarding the environment, nutrition and so on better left to experts in those fields? ‘But if you ask a malaria expert where the money is best spent, you shouldn’t be too surprised if the answer is malaria,’ says Lomborg. ‘What economists can do which natural scientists cannot is, in effect, to put the prices on the menu. They are not saying, “You should pick this meal or that meal.” What they are saying is, “If you pick the lobster, you’ll have less to spend on everything else.”’
The principal question Lomborg encounters is, ‘Why should we have to pick and choose? Why shouldn’t we be able to do it all?’ He even heard this line from a US congressman, who said, ‘I can understand why a small country like Denmark has to focus on priorities, but America is so big.’ ‘I had to remind him that even though the US is indeed a lot bigger, it still seemed to me that in the last 50 years it hadn’t yet fixed all the problems in the world.’
What non-economists tend to have difficulty understanding, says Lomborg, is the concept of marginal benefit. ‘We tend to think in terms of absolute magnitude, so people will say, “Global warming is overall a bigger problem than micronutrition so we should deal with that first.” But what economists say is, “No. If you can spend a billion dollars and save 600,000 kids from dying and save about two billion people from being malnourished, that’s a lot better than spending the same amount to postpone global warming by about two minutes at the end of the century.”’
In the early days of his campaigning, when he first transformed himself from left-leaning Greenpeace-supporting tree-hugger to environmental ‘skeptic’, Lomborg used to get a lot more stick than he does now. His unlikely ally, he says, has been the ongoing biofuels disaster, whereby a scheme introduced to help save the environment has helped bring about riots, rising food prices and the destruction of rainforest. ‘People have suddenly started to realise: “Ew! Not every drastic measure we take in panic is smart!”’ he says. (The American-accented ‘Ew’ bit, by the way, is the only moment where he sounds remotely camp.)
Unlike proper climate change sceptics (who are the equivalent, George Monbiot has famously claimed, of Holocaust deniers), Lomborg says his views on global warming are broadly in sympathy with those of the Intergovernmental Panel on Climate Change (IPCC). Where he thinks the green movement has got things badly wrong is in attempting to shut down any form of critical opposition.
‘You cannot have a conversation about the biggest policy argument of the day, and then say that one side isn’t allowed to debate,’ says Lomborg. He thinks the greens have also done their cause a great disservice by talking up the climate change threat. ‘You can overplay your cards and screech so loudly that you end up losing the argument.’
The battle for common sense, though, is far from over. His worry is that the next Kyoto update — the Copenhagen summit in 2009 — will prove yet another wasted opportunity where politicians set themselves ever higher pie-in-the-sky targets on carbon emissions. ‘The danger is not that we’re not going to meet these targets, because I take that as granted — of course we’re not going to meet them, just as we didn’t after Kyoto in 1997. What’s far worse, is that yet again, it will stop us focusing on all the incredible things we actually could do with that money. So we end up wasting another ten or 20 years.’
Tuesday, June 17, 2008
Sunday, June 8, 2008
How Bad Government Caused the Food Crisis
In The Spectator, 28.05.08, Julian Morris argues that recent food shortages & price rises of staple foods in Asia & Latin America have been caused as much by political parasites as by poor harvests.
On the road to Agra, travelling to see the Taj Mahal, we found ourselves passing a seemingly endless convoy of trucks. Well, not so much a convoy as a convention, since the trucks were stationary. Miles and miles of motionless juggernauts, their drivers smoking biddies or drinking chai on the roadside. I turned to my colleagues and said, facetiously, ‘Sustainable transport.’
We had intended to see one of the Great Wonders of the World that day, but had stumbled across another. Our driver explained that the trucks were queuing to pay a toll levied by the Delhi government. The queue can last up to four days, though some drivers expedite the process with palm grease.
In temperate climates, food left in a truck for a day may suffer some spoilage. In India in May, with outside temperatures pushing 40˚C, the consequences of four days in an unrefrigerated truck are devastating. Yet, amazingly, Delhi’s inefficiently administered tolls are not unusual. In much of Asia, Africa and Latin America, such barriers are commonplace.
When the Economist’s Robert Guest hitched a ride on a truck transporting Guinness through Cameroon, a day trip turned into a four-day marathon, in part because of ‘swampy roads and a collapsed bridge’, but mainly because of ‘police road blocks, of which we met 47’. Such road blocks are a symptom of the lack of the rule of law: police officers are not held to account for applying ‘laws’ that for the most part they make up on the spot. In Britain, they could be prosecuted for trespass or false arrest; not in Cameroon.
Globally, nearly 50 per cent of food spoils before it reaches consumers. The blame rests mainly with governments, whose culpability comprises not only absurd internal levies, a failure to apply the rule of law, and incompetence in providing transport infrastructure, but also taxes and other barriers imposed on the use of technologies such as packaging and refrigeration that might have helped preserve food.
These barriers to distribution are just one of the ways parasitical politicians have caused the current global food crisis. Through legislation on land ownership, regulations on business and control over the justice system, governments actively undermine agricultural improvements — and rural development more generally. The tragedies that recently engulfed southern China and Burma were both magnified enormously by such politically induced poverty.
While Delhi has been booming on the back of India’s high-tech revolution, we saw villages near Agra that appear to have changed little since the great memorial to Shah Jahan’s wife Mumtaz was completed in 1653. Little mud huts sprouted from fields, interspersed with fires fuelled by dung collected by young girls from deposits made by emaciated sacred cows. An occasional scooter traversing the muddy collection of potholes that passes for a road was the only sign of modernity.
Yet India has been less adversely affected by the global food ‘crisis’ than many other poor countries. In large part, this is because of the ‘green revolution’, which dramatically increased agricultural yields, turning the country from a net importer of food to a net exporter.
Green revolution technologies were developed to overcome natural constraints on productivity. Wild plants tend to have long stalks, which confer genetic advantage by ensuring that seeds are scattered far and wide. In domestic crops, however, a long stalk represents a waste of resources. So dwarf crop varieties were developed that produce more of the nutritious seed and less stalk.
Other constraints include inadequate soil nutrition, caused by overuse or erosion; predation by viruses, bacteria, insects and rodents; and competition from other plantlife, namely weeds. Unchecked, these can cause crop losses of 50 per cent or more. But with modern synthetic fertilisers and sophisticated delivery systems, farmers can optimise nutrient levels. With chemical herbicides, farmers can destroy weeds without tilling the land, thereby increasing yields and reducing erosion. Meanwhile, insecticides, rodenticides and bio-engineered crops can dramatically reduce predation. Combined with better irrigation and other advances, these technologies have resulted in a doubling of global crop production in the past 50 years, even though agricultural land use has risen by only a tenth.
But these gains have not, for the most part, reached sub-Saharan Africa, whose political elite has little interest in promoting progress. In much of Africa, weak property rights and an absence of the rule of law undermine the capacity of smallholders to invest in improvements to their land. Meanwhile, various taxes and tariffs mean the average price of fertiliser is six times the world price.
These production constraints are compounded by barriers to the sale of goods. Many African governments still operate marketing boards, which force farmers to sell at below market prices. They also impose average tariffs of 30 per cent on imports of agricultural goods from other African countries, driving up prices of food produced in Africa and discouraging production. Subsidies to Western agriculture have exacerbated this problem by driving down the price of commodities produced outside Africa.
Similar interventions have prevented economic development more generally. As a result, even at the best of times, most Africans consume barely enough food to keep them in good health. Millions consume too little — contributing to widespread disease and early death. And this year, several external factors have combined to make the situation far worse.
A major factor has been increased demand for energy and food — driven by the rising wealth of the majority of people around the world and especially those in rapidly growing countries such as China, India, Brazil and Vietnam. As Angela Merkel put it recently, many Indians now have two meals a day — how dare they?!
Increased demand, combined with limited supply, has resulted in a rise in relative prices: oil and food now cost considerably more than they did a year ago. In a free market, entrepreneurs respond to such price rises by investing in the production of more of the scarce goods or close substitutes. Demand for computers and cars has increased dramatically in the past two decades, but they have not become more scarce or expensive — rather the opposite: better models have been developed and supply increased, so that demand is met at lower prices. But neither oil nor food exist in a free market.
Most of the world’s oil is owned and extracted by governments, not by private individuals or companies. So investments in the development of that oil do not follow normal market rules. In Iran, home to the world’s second largest oil reserves, inefficient production technologies mean that oil output, rather than rising in response to increasing demand, has been falling by about 10 per cent a year. Venezuela, Mexico and Russia face similar problems. Even Saudi Arabia is producing at well below its potential. The result: further price rises.
High oil prices have incentivised the production of substitutes — especially biofuel. On its own, this market response would not have had a significant impact on the production of food crops. But governments, responding to lobbying by vested interests and environmental groups, are now subsidising biofuel production — both directly and by mandating the use of ethanol in fuel.
The rising price of oil has also increased costs of agricultural production. Add in drought and diseases and you have a perfect storm in which food production has fallen temporarily even as demand has risen — driving up prices dramatically. Many basic commodities have doubled in price in the past year. Many millions of people are struggling to feed themselves and their families — especially those in urban slums.
Some governments have responded by imposing price controls and export restrictions, including bans. These policies may temporarily reduce the prices that local consumers pay for food, but they also reduce the profits from food production, incentivise farmers to switch to more lucrative products and drive up food prices globally. Export bans also directly raise the price importers pay for food. If continued, these policies could make next season’s food crisis even worse.
Others argue for subsidising inputs such as seed and fertiliser. For three years, Malawi has been experimenting with subsidies, part funded by the UK Department for International Development. But such policies have been widely employed in the past half-century, so we know what happens. In the short term, output increases — as it has in Malawi. But by distorting prices, the incentives to use the most cost-effective inputs are reduced, so efficiency suffers. In the long term, output suffers too because subsidies tend to go to vested interests, so farmers fail to adopt newer, better technologies. Crop yields in India, which continues to subsidise inputs, remain 30 to 50 per cent below those in the USA.
Instead of banning exports or providing subsidies, governments should be removing barriers to production and distribution, and letting the market respond effectively to changes in supply and demand. That is the best way to ensure that people are able to feed themselves, now and in the future.
On the road to Agra, travelling to see the Taj Mahal, we found ourselves passing a seemingly endless convoy of trucks. Well, not so much a convoy as a convention, since the trucks were stationary. Miles and miles of motionless juggernauts, their drivers smoking biddies or drinking chai on the roadside. I turned to my colleagues and said, facetiously, ‘Sustainable transport.’
We had intended to see one of the Great Wonders of the World that day, but had stumbled across another. Our driver explained that the trucks were queuing to pay a toll levied by the Delhi government. The queue can last up to four days, though some drivers expedite the process with palm grease.
In temperate climates, food left in a truck for a day may suffer some spoilage. In India in May, with outside temperatures pushing 40˚C, the consequences of four days in an unrefrigerated truck are devastating. Yet, amazingly, Delhi’s inefficiently administered tolls are not unusual. In much of Asia, Africa and Latin America, such barriers are commonplace.
When the Economist’s Robert Guest hitched a ride on a truck transporting Guinness through Cameroon, a day trip turned into a four-day marathon, in part because of ‘swampy roads and a collapsed bridge’, but mainly because of ‘police road blocks, of which we met 47’. Such road blocks are a symptom of the lack of the rule of law: police officers are not held to account for applying ‘laws’ that for the most part they make up on the spot. In Britain, they could be prosecuted for trespass or false arrest; not in Cameroon.
Globally, nearly 50 per cent of food spoils before it reaches consumers. The blame rests mainly with governments, whose culpability comprises not only absurd internal levies, a failure to apply the rule of law, and incompetence in providing transport infrastructure, but also taxes and other barriers imposed on the use of technologies such as packaging and refrigeration that might have helped preserve food.
These barriers to distribution are just one of the ways parasitical politicians have caused the current global food crisis. Through legislation on land ownership, regulations on business and control over the justice system, governments actively undermine agricultural improvements — and rural development more generally. The tragedies that recently engulfed southern China and Burma were both magnified enormously by such politically induced poverty.
While Delhi has been booming on the back of India’s high-tech revolution, we saw villages near Agra that appear to have changed little since the great memorial to Shah Jahan’s wife Mumtaz was completed in 1653. Little mud huts sprouted from fields, interspersed with fires fuelled by dung collected by young girls from deposits made by emaciated sacred cows. An occasional scooter traversing the muddy collection of potholes that passes for a road was the only sign of modernity.
Yet India has been less adversely affected by the global food ‘crisis’ than many other poor countries. In large part, this is because of the ‘green revolution’, which dramatically increased agricultural yields, turning the country from a net importer of food to a net exporter.
Green revolution technologies were developed to overcome natural constraints on productivity. Wild plants tend to have long stalks, which confer genetic advantage by ensuring that seeds are scattered far and wide. In domestic crops, however, a long stalk represents a waste of resources. So dwarf crop varieties were developed that produce more of the nutritious seed and less stalk.
Other constraints include inadequate soil nutrition, caused by overuse or erosion; predation by viruses, bacteria, insects and rodents; and competition from other plantlife, namely weeds. Unchecked, these can cause crop losses of 50 per cent or more. But with modern synthetic fertilisers and sophisticated delivery systems, farmers can optimise nutrient levels. With chemical herbicides, farmers can destroy weeds without tilling the land, thereby increasing yields and reducing erosion. Meanwhile, insecticides, rodenticides and bio-engineered crops can dramatically reduce predation. Combined with better irrigation and other advances, these technologies have resulted in a doubling of global crop production in the past 50 years, even though agricultural land use has risen by only a tenth.
But these gains have not, for the most part, reached sub-Saharan Africa, whose political elite has little interest in promoting progress. In much of Africa, weak property rights and an absence of the rule of law undermine the capacity of smallholders to invest in improvements to their land. Meanwhile, various taxes and tariffs mean the average price of fertiliser is six times the world price.
These production constraints are compounded by barriers to the sale of goods. Many African governments still operate marketing boards, which force farmers to sell at below market prices. They also impose average tariffs of 30 per cent on imports of agricultural goods from other African countries, driving up prices of food produced in Africa and discouraging production. Subsidies to Western agriculture have exacerbated this problem by driving down the price of commodities produced outside Africa.
Similar interventions have prevented economic development more generally. As a result, even at the best of times, most Africans consume barely enough food to keep them in good health. Millions consume too little — contributing to widespread disease and early death. And this year, several external factors have combined to make the situation far worse.
A major factor has been increased demand for energy and food — driven by the rising wealth of the majority of people around the world and especially those in rapidly growing countries such as China, India, Brazil and Vietnam. As Angela Merkel put it recently, many Indians now have two meals a day — how dare they?!
Increased demand, combined with limited supply, has resulted in a rise in relative prices: oil and food now cost considerably more than they did a year ago. In a free market, entrepreneurs respond to such price rises by investing in the production of more of the scarce goods or close substitutes. Demand for computers and cars has increased dramatically in the past two decades, but they have not become more scarce or expensive — rather the opposite: better models have been developed and supply increased, so that demand is met at lower prices. But neither oil nor food exist in a free market.
Most of the world’s oil is owned and extracted by governments, not by private individuals or companies. So investments in the development of that oil do not follow normal market rules. In Iran, home to the world’s second largest oil reserves, inefficient production technologies mean that oil output, rather than rising in response to increasing demand, has been falling by about 10 per cent a year. Venezuela, Mexico and Russia face similar problems. Even Saudi Arabia is producing at well below its potential. The result: further price rises.
High oil prices have incentivised the production of substitutes — especially biofuel. On its own, this market response would not have had a significant impact on the production of food crops. But governments, responding to lobbying by vested interests and environmental groups, are now subsidising biofuel production — both directly and by mandating the use of ethanol in fuel.
The rising price of oil has also increased costs of agricultural production. Add in drought and diseases and you have a perfect storm in which food production has fallen temporarily even as demand has risen — driving up prices dramatically. Many basic commodities have doubled in price in the past year. Many millions of people are struggling to feed themselves and their families — especially those in urban slums.
Some governments have responded by imposing price controls and export restrictions, including bans. These policies may temporarily reduce the prices that local consumers pay for food, but they also reduce the profits from food production, incentivise farmers to switch to more lucrative products and drive up food prices globally. Export bans also directly raise the price importers pay for food. If continued, these policies could make next season’s food crisis even worse.
Others argue for subsidising inputs such as seed and fertiliser. For three years, Malawi has been experimenting with subsidies, part funded by the UK Department for International Development. But such policies have been widely employed in the past half-century, so we know what happens. In the short term, output increases — as it has in Malawi. But by distorting prices, the incentives to use the most cost-effective inputs are reduced, so efficiency suffers. In the long term, output suffers too because subsidies tend to go to vested interests, so farmers fail to adopt newer, better technologies. Crop yields in India, which continues to subsidise inputs, remain 30 to 50 per cent below those in the USA.
Instead of banning exports or providing subsidies, governments should be removing barriers to production and distribution, and letting the market respond effectively to changes in supply and demand. That is the best way to ensure that people are able to feed themselves, now and in the future.
Sunday, June 1, 2008
Elegant Emirates
This is an extract from an article by Molly Watson in The Spectator, 21.05.08:
' In 3 years time Abu Dhabi will unveil a new Frank Gehry-designed 100M pounds sterling Guggenheim Museum housing art from the Louvre and our own Royal Academy.
This sense of elegance even extends to Abu Dhabi's macro-economic choices. Despite having at least 50 more years worth of oil reserves, there is a concerted move to diversify the economy away from petroleum. Abu Dhabi's population is now among the best educated on the planet and its leaders are investing in everything from international healthcare to green technologies. Next year, Masdar, the world's first totally green city designed by Norman Foster, will open on the capital city's suburbs and set a new global standard in solar technology.'
' In 3 years time Abu Dhabi will unveil a new Frank Gehry-designed 100M pounds sterling Guggenheim Museum housing art from the Louvre and our own Royal Academy.
This sense of elegance even extends to Abu Dhabi's macro-economic choices. Despite having at least 50 more years worth of oil reserves, there is a concerted move to diversify the economy away from petroleum. Abu Dhabi's population is now among the best educated on the planet and its leaders are investing in everything from international healthcare to green technologies. Next year, Masdar, the world's first totally green city designed by Norman Foster, will open on the capital city's suburbs and set a new global standard in solar technology.'
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