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The economy is no exact science. The complexity of cost/benefit analysis (CBA) accepts that the approach towards environmental issues and human welfare is not a perfect or an absolute valuation tool. Regarding human lives, the CBA approach can conflict with moral ethics, in spite of the fact that society places prices and limits on human lives on a regular basis, especially when it pertains to public goods and institutions. But this should not be reason enough not to use CBA, especially in the case of Bjørn Lomborg’s Copenhagen Consensus.
For those of you who do not already know who Bjørn Lomborg is, he is arguably Denmark’s biggest environmental superstar. He is the author of ‘The Skeptical Environmentalist’ and ‘Cool It;’ has been named one of the 100 Top Global Thinkers by the Foreign Policy (2010) and one of the world’s 75 most influential people of the 21st century by Esquire (2008.) Lomborg is also the director of The Copenhagen Consensus Center, which is a Danish think-tank that publicizes ways for governments and philanthropists to spend aid and development money on global challenges in the most cost-efficient way. Examples of such challenges are: HIV/AIDS, malaria, malnutrition, sanitation and water, and climate.
The Copenhagen Consensus is applied to the world’s biggest challenge that can potentially be solved today and categorized according to priority of economic costs and benefits. Although imperfect, it can be argued that when it comes to rational (and perhaps even democratic) decision-making, the methodological approach of CBA can be a practical and consistent tool to aid in making ‘difficult’ calculations that have potential to improve global misgivings. The fundamental assumption here is that it is better to use CBA and to make quantifications on human life than to not do anything at all because this can only increase the knowledge needed to create efficient strategies that can aid humanity. There are advantages towards assessing monetary value of different solutions so as to create an explicit list of global priorities, as is the definite case for The Copenhagen Consensus.
CBA is rooted in welfare economics and utilitarianism and so is in principle, considered a realistic tool as it assists in comparing outcomes on the basis of what gives the greatest benefits to the greatest number of people. In that sense it is a useful tool as it takes into account the efficiency of resource allocation relevant to global social concerns. However, these problems do not take into strong account for intra and inter-generational fairness. In that respect, it could be argued that the CBA used in the Consensus does not take into consideration its sustainability, at least not ‘strong sustainability.’
The Copenhagen Consensus is useful for comparing possible resource allocation that can thus help decision-makers devise efficient solutions for global problems. However it must be stressed that including human valuation or the environment within CBA is arguably not the best way to protect welfare or promote sustainable development and so perhaps a more holistic approach of the monetary costs and benefits should be applied.
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