No subject

I like Lomborg a lot, for obvious reasons. :-)

Notice, however, what he implies about terrorism and financial  
privacy, channeling Todd Sandler at the University of Texas: an attack  
on financial privacy is quite simply the cheapest way to prosecute the  
global war on terror.

Obviously, if privacy were a *necessary* component of financial  
operations -- that is, if it were significantly cheaper than  
transparency is now and thus a business requirement -- then the  
heretofore mundane business of financial operations wouldn't be used  
so much as a cudgel to destroy liberty in the name of safety.

Fortunately, even in these post-9/11 "wilderness years", with people  
like the E-Gold principals being threatened with prison for offering,  
if you will, non-repudiable potentially-unlinkable trans-national book- 
entry transactions, I think we're approaching an inflection point in  
the opposite direction.

I think that the cost of identity rises, probably exponentially, as  
transaction settlement time tends toward zero. Gibson's "Burning  
Chrome" is the the canonical worst case; someone can pretend to be you  
and instantly -- this being a T-zero transaction environment -- take  
all your stuff.

Oppositely, I think that functionally anonymous transactions, digital  
bearer transactions like Chaum's blind-signature protocol and its  
offspring, will become *more* valuable, probably exponentially so, as  
transaction settlement time tends to zero. In that instance, a "total  
loss" is limited to exactly the value of transaction itself, and  
nothing more.

Obviously, only the future will tell if the above hypothesis is right,  
but I'm starting to feel pretty optimistic about it, and now more so  
than at any time since 9/11.

I hate to rely on an asymptote to prop up my argument; it would be  
nice to see privacy cheaper than transparency as a ubiquitous case.  
But maybe that asymptote is the thin edge of the wedge (to stretch the  
metaphor beyond it's, heh, limits...), something that will ultimately  
reverse the great trend away from privacy that began with the  
Hollerith card and the ubiquity of electronic book-entry transaction  
settlement.

It has happened before. People who've read my writing, and that of  
Peter Huber's in "The Geodesic Network", will remember how it was the  
demand for "universal" telephone service that created the need for  
automated telephone switching. Something that gave us not only  
electromechanical switching, but the transistor, the microprocessor,  
and, ultimately, Moore's Law. Thus our own emerging geodesic society  
is based on the geodesic networks caused by another asymptotic trend,  
that toward telephonic ubiquity.

Cheers,
RAH
-------

<http://online.wsj.com/article_print/SB121720170185288445.html>

The Wall Street Journal

July 28, 2008

OPINION


How to Get the Biggest Bang for 10 Billion Bucks
By BJORN LOMBORG
July 28, 2008; Page A15

If you had a spare $10 billion over the next four years, how would you  
spend it to achieve the most for humanity?

This is a small amount compared to rich-government budgets. But if we  
could set aside an extra $10 billion, we could achieve an awful lot.

Would you spend your money tackling diseases like malaria, HIV and  
tuberculosis, which claim millions of lives each year? Would you  
battle hunger and malnutrition? What about climate change, which many  
believe is the biggest challenge facing the planet?

To get the most bang for your buck -- and ensure that your generosity  
does the greatest good for the largest number of people -- you will  
need to prioritize, weighing up the costs and benefits of different  
options. Unfortunately, we too often focus on the most fashionable  
spending options, rather than the most rational. Spending an extra  
dollar cutting C02 to combat climate change generates less than one  
dollar of good, even when we add up all the economic and environmental  
benefits. In contrast, a dollar spent on research and development into  
cleaner energy technology generates $11 of economic good. If that  
dollar was spent combating heart disease in the third world, it would  
achieve more than twice that again.

Copenhagen Consensus commissioned eight of the world's top economists  
to identify the global challenges that can be solved most cost- 
effectively. Over the coming weeks, we will be challenging decision  
makers and opinion leaders to weigh in on this debate. We also  
encourage you to go to OpinionJournal.com1 and respond to this article  
with your own priorities.

But first, our economists describe how much your extra dollar can  
achieve in a few areas:

Terrorism has become one of the biggest fears. Yet transnational  
terrorists take, on average, 420 lives each year and cause relatively  
little economic damage.

An extra $70 billion world-wide has been spent annually on homeland  
security since 2001. Although there has been a 34% drop in  
transnational terrorist attacks, there have been 67 more deaths, on  
average, each year.

This hike in the death toll is entirely predictable. Terrorists have  
responded rationally to the higher risks imposed by tougher security  
measures and shifted to fewer attacks that create more carnage.

Increased counterterrorism measures often simply transfer terrorists'  
attention elsewhere. Installing metal detectors in airports in 1973  
decreased skyjackings but increased kidnappings. Fortifying American  
embassies reduced the number of embassy attacks, but increased the  
number of assassinations of diplomatic officials. Since  
counterterrorism measures were increased in Europe, the U.S. and  
Canada, there has been a clear shift in attacks against U.S. interests  
to the Middle East and Asia.

Politicians who choose to make counterterrorism a priority have stark  
options. Spending ever more money making targets "harder" is an easy  
choice for politicians -- although it will do little to genuinely  
reduce the terrorist threat.

Increasing defensive measures world-wide by 25% would cost at least  
$75 billion over five years. In the extremely unlikely scenario that  
attacks dropped by 25%, the world would save about $21 billion. That  
figure is reached by adding up the economic damage caused by  
terrorists, and by putting a high economic value on the lives lost.

But even in this best-case scenario, the costs will be at least three  
times higher than the benefits. Put another way, each extra dollar  
spent increasing defensive measures will generate -- at most -- about  
30 cents of return.

We could save about 105 lives a year, globally. There are few areas  
where we would consider spending so much to do so little. To put this  
into context, 30,000 lives are lost annually on U.S. highways.

Fostering greater international cooperation to cut off terrorists'  
financing would be relatively cheap and quite effective. This would  
involve greater extradition of terrorists and clamping down on the  
charitable contributions, drug trafficking, counterfeit goods,  
commodity trading, and illicit activities that allow them to carry out  
their activities.

While this approach would do little to reduce the number of small  
events, such as "routine" bombings or political assassinations, it  
could significantly impede the spectacular attacks that involve a  
large amount of planning and resources. But this would be difficult to  
achieve, because nations jealously guard their autonomy over police  
and security matters. A single noncooperating nation could undo much  
of others' efforts.

Doubling the Interpol budget and allocating one-tenth of the  
International Monetary Fund's yearly financial monitoring and capacity- 
building budget to tracing terrorist funds would cost about $128  
million annually. Stopping one catastrophic terrorist event would save  
the world at least $1 billion. Under these assumptions, this would  
mean a return of about $9 on each dollar spent.

(Figures based on research by Todd Sandler, University of Texas.)

CLIMATE CHANGE

There is unequivocal evidence that humans are changing the planet's  
climate. We are already committed to average temperature increases of  
about 1.1 degrees Fahrenheit, even without further rises in  
atmospheric carbon dioxide concentration.

The world has focused on mitigation -- reducing carbon emissions -- as  
its response to this challenge. The Kyoto Protocol was an  
international attempt to cut back on these emissions, and at the end  
of 2009 politicians will gather in Copenhagen to discuss Kyoto's  
successor. Although we don't focus on other possible solutions to this  
challenge, they do exist.

If mitigation -- economic measures like taxes or trading systems --  
succeeded in capping industrialized emissions at 2010 levels, then the  
world would pump out 55 billion tons of carbon emissions in 2100,  
instead of 67 billion tons.

This is a difference of 18%; but the benefits would remain smaller  
than 0.5% of the world's GDP for more than 200 years. These benefits  
simply are not large enough to make the investment worthwhile.

Spending $800 billion (in total present-day terms) over 100 years  
solely on mitigating emissions would reduce temperature increases by  
just 0.4 degrees Fahrenheit by the end of this century.

When you add up the benefits of that spending -- from the slightly  
lower temperatures -- the returns are only $685 billion. For each  
extra dollar spent, we would get 90 cents of benefits -- and this is  
even when things like environmental damage are taken into account.

A continued narrow focus on mitigation alone will clearly not solve  
the climate problem. One problem right now: Although politicians base  
their decisions on the assumption that low-carbon energy technology is  
being rapidly developed, that is not the case. These technologies just  
do not exist. Wind and solar power are available -- at a high expense  
-- but suffer from intermittency. Researchers need to develop better  
ways to store electricity when those renewable sources are offline.

If we took that $800 billion and spent it on research and development  
into clean energy, the results would be remarkably better. In  
comparison with the 90-cent return from investing solely in  
mitigation, each dollar spent on research and development would  
generate $11 of benefits.

(Figures based on research by Gary Yohe, Wesleyan University, and  
Christopher Green, McGill University.)

DISEASES

Life expectancy is decreasing in some parts of the world. Ten million  
children will die this year in poor nations. This figure would be just  
one million if child mortality rates were the same as in rich countries.

The hurdle is not just poverty -- some poor nations have reasonably  
good health conditions -- but getting cheap treatment and prevention  
methods to the Third World. There are many ways that we could spend a  
little money very wisely to make a big difference.

Some health problems receive a lot of publicity. Investment in other  
areas we hear less about could make a big difference -- such as heart  
disease in developing nations. Cheap drugs, widely available in rich  
countries, can manage two major components of cardiovascular risk:  
hypertension and high cholesterol levels. Simple drugs can also be  
highly effective in reducing mortality among the millions of adults  
world-wide who already have some form of vascular disease or diabetes.

In poor countries, where heart disease represents more than a quarter  
of the death toll, these cheap drugs are often unavailable. Spending  
just $200 million getting them to poor countries would avert 300,000  
deaths each year. The lower burden on health systems, and the economic  
benefits, mean that an extra dollar spent on heart disease in a  
developing nation would achieve $25 worth of good.

Much more could be done to reduce the scourge of communicable  
diseases. In poor countries, malaria will claim more than one million  
lives this year -- most of them among children under five. Measures to  
reduce its transmission are simple: more bed nets, preventive  
treatment for pregnant women, and more indoor spraying with DDT.

Treating malaria is becoming harder because of growing resistance of  
the malaria parasite to the cheapest, most common antimalarial drugs.  
Some poor nations cannot afford the new artimisinin combination  
therapies that work best, and need financial support.
It makes sense to combine prevention options like bed nets with  
subsidies on the new treatments for poor nations. Spending $500  
million would save 500,000 lives a year -- most of them children.

Each dollar spent on ensuring people are healthier and more productive  
would generate $20 in benefits.

(Figures based on research by Dean Jamison, U.S. National Institutes  
of Health.)

HUNGER

The food crisis has reminded us that hunger and malnutrition is a  
daily reality for many in South Asia and sub-Saharan Africa.  
Malnutrition in mothers and their young children will claim 3.5  
million lives this year. Global food stocks are at historic lows. Food  
riots have erupted in West Africa and South Asia. Progress is  
distressingly slow on the United Nations' goal of halving the number  
of hungry people by 2015.

Individual tragedy and national hardship go hand in hand. Shortened  
lives mean less economic output and income. Hunger leaves people more  
susceptible to disease, requiring more health-care spending. Those who  
survive the effects of malnutrition are less productive; physical and  
mental impairment means children benefit less from education.

There is an obvious focus in improving the quantity of food consumed  
in developing countries. But it is also vital to improve the quality  
of diets, especially for children. Eighty percent of the world's  
undernourished children are in South Asia and sub-Saharan Africa.  
There are massive benefits from increasing the micronutrients that are  
lacking in poor communities' diets.

Providing micronutrients -- particularly vitamin A and zinc -- to 80%  
of the 140 million or so undernourished children in the world would  
require a commitment of just $60 million annually, a small fraction of  
the billions spent each year battling terrorism or combating climate  
change. The economic gains from improved productivity and a lower  
burden on the health system would eventually clear $1 billion a year.  
Every dollar spent, therefore, would generate economic benefits worth  
$17.

Investing in research to make technological improvements to developing- 
country agriculture provides the opportunity to improve access to  
micronutrients. It also reduces the cost of food by increasing the  
incomes of landless laborers. Biofortification can be achieved through  
genetic modification, or through other methods. Spending $60 million a  
year would be enough to develop two staple crops such as rice and  
wheat fortified with micronutrients for about 40 countries across  
South Asia and sub-Saharan Africa.

The improved nutrition would lead to higher productivity and fewer  
health problems. Each extra dollar spent would generate economic  
benefits worth $16.

(Figures based on research by Susan Horton, Wilfrid Laurier University.)

Finding the most cost-effective ways to tackle the world's problems is  
no simple challenge and should not be left to professional economists  
alone. Please go to OpinionJournal.com3 to add your voices to this  
important debate about prioritization.

Mr. Lomborg is the director of the Copenhagen Consensus. For more  
information please visit www.copenhagenconsensus.com4.

URL for this article:
http://online.wsj.com/article/SB121720170185288445.html


Hyperlinks in this Article:
(2) http://online.wsj.com/page/2_1595.html
(4) http://www.copenhagenconsensus.com
(6) http://forums.wsj.com/viewtopic.php? t=3467

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