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Sunday, June 8, 2008

Getting Our Priorities Straight: Trade Is Tops
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Consensus is often a bad word in my book. Especially in matters of science. Science, after all, is not about democracy, compromise, or conventional wisdom but truth.

Global warming is the most familiar recent scientific debate where the "consensus" lines up behind catastrophic anthropogenic global warming but the most eminent scholars in each field -- from cosmology and solar radiance to ocean currents and hurricanes, from geology and statistics to ice and clouds -- robustly disagree with this "consensus."

So thank goodness for this new report from the Copenhagen Consensus Center, led by Danish environmentalist Bjørn Lomborg. Stripping away the hype, Oscar statuettes, and supposed "consensus," a special committee of eight eminent economists reviewed a list of 30 problems and opportunities facing the world and ranked them on a cost/benefit scale. Global warming mitigation came in dead last. That's right: number 30 out of 30.

Here in the U.S. we've been debating cap-and-trade energy limitations, which would intrude into every nook and cranny of the energy economy and transfer wealth from average consumers to favored political interests -- some $6 trillion of transfers over the next four decades. The supposed target is global warming, but the real targets are businesses and tax-payers.

Global warming has dominated our public discourse for the last few years, at least since Al Gore's catastromentary and the media's pathetic complicity in the propaganda. A "planet in peril," they call it. What could be more important than saving Earth from an atmospheric inferno?

Actually, says the Copenhagen Consensus report, lots of things. Number one on the list is simple nutritional supplements like vitamin A and zinc for malnourished children in Africa and other developing regions.

Number two on the list? Free trade.

Consummating the Doha free trade agreement would bring more benefit to the world at lower cost than the 28 other items the committee considered.

But how much attention has the Doha round gotten these last few years? Generic trade issues have gotten lots of attention, but most often it's Lou Dobbs ranting about globalization, our own government scuttling cross-border investment, or Congress shooting down the Columbian FTA. Far from a realization that Doha and other free-trade efforts expand freedom and build wealth, protectionism is on the rise. Meanwhile, we gnash our teeth and sound the alarms over what is looking more and more like a non-issue: global warming.

As The Wall Street Journal editorialized:

The benefits of freer trade were estimated in a paper presented by Professors Kym Anderson and Alan Winters. They found that a successful Doha Round could generate up to $113 trillion in new wealth during the 21st century, at a cost of $420 billion or less from inefficient industries going bust. If you like ratios, that's a return of $269 for every $1 of cost. A less conservative projection puts the gains three times higher. More than 80% of this global windfall would go to the world's poorest countries....

As Mr. Lomborg recently explained, the costs of mitigating climate change would be enormous for what are highly speculative benefits. He prefers research on new technologies, rather than a global cap-and-trade regime that would raise energy prices and thus reduce overall economic growth. Meanwhile, societies that are wealthier due to free trade will be better able to cope with the consequences of warming, if it occurs.

The Doha trade round has fallen out of the news, largely because there is so little political will to compromise and get a deal. As the Copenhagen Consensus shows, this is a global tragedy that will do far more harm to more people than a modest increase in global temperature.

posted by Bret Swanson @ 6:57 PM | Trade

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