3.5.7  Environmental Challenges: Economic Viewpoint

(This is an archived extract from the book Patterns of Power: Edition 2)

Pollution, disease, resource shortages and climate change are major economic challenges.   The actions of one country in these matters can affect what happens in other countries, as with pollution that is carried across a border by a river or is airborne, so they need to be addressed collectively.  And there is a risk of conflict as populations try to move to safety, or compete for resources.  No country is so big that it is immune from the possibility of the rest of the world swamping it in pollution, passing on diseases or affecting the climate of the planet as a whole.  Emigration might be the only option for people in some less wealthy countries unless something can be done to help them.

Collective action to solve global economic problems would require collective funding and these funds would be hard to obtain.  It is appropriate to compare the competing claims for global projects, to ensure that there is a strong financial justification for anything which is done.  The Copenhagen Consensus Centre was set up under the auspices of the Copenhagen Business School to carry out and publish research into the comparative economic benefits of measures to try to solve some of “the world's biggest challenges”.[1]  Its report on 16 May 2012, entitled The Smartest Ways to Save the World, highlighted the fight against malnutrition as the most cost-effective investment, and several other health-related projects were mentioned as being cost-effective.  Politicians would have to reach the necessary agreement on funding and managing the necessary health projects, through the UN ( and the World Bank (3.4.4).

The subject of pollution control is another political issue; political pressure can be put on polluters and collective funding might not be needed.  Several problems have been successfully managed in this way (6.7.5).

Resource shortages are potentially an economic problem but, as noted earlier (3.2.6), many problems will be resolved by finding substitutes or new sources of supply.  That argument, however, doesn't apply quite so simply to water shortages.  It is possible to convert seawater to drinking water, but this opportunity is most cost-effective for countries with hot climates and access to the sea.  For other countries there is the possibility of conflict as one country takes water from a river that would otherwise have flowed into another country.  Resolving such conflicts might be a matter for international courts (, or for the UN to act as an arbitrator (; otherwise countries might take the law into their own hands and use military force (7.3.1).

Climate change is the most difficult of the global economic challenges.  There are disagreements about whether action is needed, and the most appropriate approach isn’t obvious.  Four aspects of the problem are examined below:

·      The controversy over the best response to climate change (

·      Cost-effective measures to mitigate climate change (

·      Adaptation ( might be cheaper than trying to prevent it.

·      Private enterprise should choose the best technology (

© PatternsofPower.org, 2014

[1] The Copenhagen Consensus Centre’s description of its work appeared on its web-site, available in April 2014, at http://www.copenhagenconsensus.com/what-we-do.