No-Brainer Sustainable Development
Posted by hkarner - 17. September 2016
BUDAPEST – The 2030 United Nations Sustainable Development Goals have among their objectives primary-school education for all children, jobs for all adults, and an end to hunger and poverty. These are noble aspirations – but very expensive. Can we really afford them all?
The OECD has estimated that meeting all 17 SDGs, which comprise 169 specific development targets, would cost $3.3-4.5 trillion annually – about the same as the United States’ 2016 federal budget, and far more than the nearly $132 billion spent globally on overseas development aid last year.
In fact, just providing universal primary education would require at least $17 billion of additional spending per year, and a UN General Assembly intergovernmental committee estimates that eradicating poverty would require annual investments in infrastructure of $5-7 trillion globally. In truth, estimates vary because nobody is quite sure how much the SDGs will cost.
Meanwhile, donor countries are unlikely to provide meaningful increases in development funding anytime soon. In the United Kingdom, voters want to renege on a previous foreign-aid commitment – amounting to 0.7% of GDP – by a margin of two to one. In the United States, Republican presidential candidate Donald Trump has said that the federal government should “stop sending foreign aid to countries that hate us.” And in Australia, the government has already slashed its aid budget to an all-time low, measured against gross national income.
If we can’t count on full funding for every SDG, then we should spend what we have wisely, and not spend more on investments that historically yield low returns. For example, in education, investing in smaller class sizes and higher teacher salaries has not had any significant impact on student test scores.
Another area that promises more than it delivers is “climate aid,” which allocates development funds to efforts to mitigate the effects of global warming. Too often, this funding serves a cosmetic purpose – making donors appear environmentally friendly – rather than effecting genuine change.
Indeed, while climate-aid schemes proliferate, many countries are still wasting billions to reduce gas prices artificially. In 2014, spending on fossil-fuel subsidies amounted to $20-30 billion in China, Egypt, Venezuela, and Algeria; $40 billion in Russia and India; and $70 billion in Iran and Saudi Arabia.
Among the many energy-related objectives of the SDGs, the call to end fossil-fuel subsidies is a no-brainer. Economists at the think tank I lead estimate that every dollar diverted from energy subsidies could generate at least $15 in benefits to society. Ending these subsidies would reduce CO2 emissions, air pollution, and automobile congestion. More important, it would free up money for other areas like health and nutrition, where simple measures can have a massive impact relative to their cost.
For example, while malaria killed more than 400,000 people last year, insecticidal nets to guard against malaria-carrying mosquitoes are effective for two to three years, and cost less than $10 to manufacture and distribute. All told, a single case of clinical malaria can be averted for as little as $11.
According to the charity evaluator Givewell, the Against Malaria Foundation saves a child’s life with every $3,500 it spends, and one study in Kenya even found that as little as $1,000 spent on bed-net distribution can prevent a child’s death. The typical American worker spends that much every year on coffee.
A small outlay can save one person from suffering through a painful fever, headaches, debilitating malaise, vomiting, and other symptoms of malaria; and it can save a community from lost economic productivity, because kids miss fewer days in school, and adults miss work less often. And it can save hundreds of thousands of lives. Our economists estimate that investing to reduce the incidence of malaria by 50% yields a 35-fold return in benefits to society.
Another simple and effective health-care intervention is to make aspirin more widely available, so that it can be taken at the onset of heart attacks to prevent death. The cost per treated case of providing this cheap drug alongside clinical visits and diagnostic tests is just $13-15, which means that we could reach 75% of the population in low- and middle-income countries for just $3.5 billion. That is roughly a fifth of what Brazil spent to host the Summer Olympic Games in Rio de Janeiro this year.
Likewise, basic nutritional interventions – especially for pregnant women and infants – can have far-reaching effects for individuals and communities. Adequate nutrition improves a child’s long-term health, educational performance, and future earnings. Investing in nutrition is another no-brainer: measures such as salt iodization, and iron and folic acid and vitamin A supplementation can cost just a few cents annually per recipient. Similarly, deworming treatments and vaccination are inexpensive, effective, and have a high return on investment.
While we should not only look for “bargains” in the SDGs, we absolutely should look for where a dollar is best spent. It will be great if we can increase funding, but it would be foolish to think that development-aid money will multiply overnight, or that the UN’s massive, quixotic development agenda has the resources to remain on track. In fact, to persuade high-income countries – and their taxpayers – to increase their development-aid outlays, we will have to be more mindful of costs and benefits, and recognize that not all development targets are equal.
When we can completely transform someone’s life for pennies, we should accept that small victory before pursuing grand projects with even grander price tags and no guarantee of success. Where money is lacking, common sense shouldn’t be.