natalie eggermontby Natalie Eggermont, member of the People’s Health Movement

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In their recent Plos article, “Who Should Pay for Global Health, and How Much?”, Luis Carrasco et al take on the task of establishing expected financial contributions from each country to achieve the health MDGs. Mirroring the cap-and-trade system in the global carbon permit market, they propose a disability-adjusted life years (DALY) global credit market.

A summary of their proposal

The authors’ reasoning is that global health falls into a category of “large-scale global commons such as climate change mitigation”. To be effectively managed, these commons require “a unanimous agreement or treaty for a collective-choice rule, such as the Kyoto Protocol”. Such a rule is currently lacking for global health – a gap they wish to address.

The method proposed is “to link global health aid donations with domestic health investment using the perspective of a hypothetical global social planner aiming to reduce global disease burden”. This social planner would try to optimize global health resource allocation. She thinks as follows: “The greater the investment on low cost-effectiveness interventions in high- and middle-income countries, the more inefficient the allocation of resources to reduce global disease burden”. So we need a way to measure global inefficient resource allocation and to compensate for it. As measurement, the authors propose a global health cost-effectiveness threshold (GHCET), under which health interventions are deemed cost-effective when the cost per DALY avoided is less than three times the GNI threshold classifying countries as low-income. To be able to compensate for inefficiency, a global DALY tradable permit market is established.

It would work like this: when you are spending too much money per averted DALY in your own country, you need to purchase averted DALYs from highly cost-effective health interventions in low-income countries to compensate for your inefficient domestic intervention, thereby reaching efficiency at the global level. What you buy on the market, like ‘tonnes of carbon emissions avoided’ in the case of climate mitigation, is DALYs potentially averted. This ‘buying of DALYs’ would amount to global health funding.

Ethical & ideological concerns

While I welcome their attempts to come up with a system to increase global health funding in a more reliable way, the proposal raises a lot of ethical and ideological questions that I feel are insufficiently addressed by the authors.

As a start, I think the two most important aspects of cap-and-trade systems are the choice of the cap and reaching agreement on the treshold. This is partly an academic or scientific exercise, but mostly an ethical question. The ethical issues, however, seem to be neglected by the authors. The article is well worked out technically but fails to argue why we would want to opt for cost-effectiveness as cap – or why not. I feel that the analogy with the climate case doesn’t fully hold here. It is much more obvious, when thinking about avoiding global warming, to go for a maximum global temperature rise as cap. In the case of global health, the relation between avoiding ‘human suffering’ and avoiding ‘inefficient resource allocation’ is much less straightforward.

However, when it comes to the issue of agreeing on a threshold, the analogy does hold. Both for climate change and global health, this is a purely ethical question. Setting a maximum on the accepted global temperature rise has been (and continues to be) subject to heated political debate[i]. Every degree more inevitably implies more human suffering accepted. I was very surprised to see the authors of the Plos paper use 550 ppm as the target for atmospheric carbon concentration by 2050, as this implies we would most certainly pass the internationally agreed limit of a 2°C rise in global average temperature[ii]. This once again illustrated, in my opinion, their inability to consider the ethical implications of cap-and-trade systems. Is all this just a case of boys playing with their toys?

Choosing a cost-effectiveness treshold as cap for global health is far from obvious, and its ethical implications worrying. My understanding is that, analogous to catastrophic climate change, the thing we would want to avoid by using the cap is global inefficient allocation of resources. Although this might lead to more DALYs averted, it still seems to imply a framework in which the acceptable limit of suffering is set by a degree of accepted cost-inefficiency; and in which the life of a cancer patient in Belgium who requires an expensive treatment package is to be valued less than that of a child saved by vaccination in Benin.

In addition, the (implicit?) assumption that increased and better allocated global health funding will do the job does not hold. Many important aspects of the right to health, such as dignity, participation in public policy making and control over the factors that shape one’s life, cannot be captured in terms of cost-effectiveness and will thus remain at the margins of global policy circles, where they have lingered for decades.  Although the big philanthropists would probably be very happy to continue investing in low-cost technology, markets and quick-wins in partnership with transnational companies, it is time for us to question the fact we are upholding a system in which so much can end up in the hands of so few. Global health justice is about much more than cost-effectiveness.

Closely related to this is the belief of the authors in market mechanisms to save our global commons – to which I have both empirical and ideological objections. To start with, their idea to introduce a global DALY credit market is based on a very positive evaluation of the use of market mechanisms to mitigate climate change, which has been a particularly contested issue in global politics. The authors write enthusiastically about the “fully functioning emissions permit markets”. The measure of success they use, is … the growth of the market: “From US$11 to US$140 billion from 2005 to 2011”. The fact that the biggest offset scheme, the Clean Development Mechanism, has actually increased emissions, while causing land grabs and human rights violations, community displacements, conflicts and increased local environmental destruction, does not seem to affect their understanding of ‘success’.  The ‘challenges’ to the system they acknowledge – “proving the integrity of carbon credits” and “the excessive allocation of allowances for carbon emissions to some middle-income countries” – focus solely on improving the efficiency of the market and neglect the human rights issues raised above. In addition, according to Friends of the Earth Europe, there are now so many unused permits that most industries covered by the European Emissions Trading System (responsible for almost 50% of EU emissions) can legally avoid making any cuts before at least 2016. The overabundance of permits has caused the price to plummet, taking away the incentive for companies to invest in low-carbon technologies.

Finally, and most importantly, market mechanisms allow powerful players to use the system to accumulate even more resources, thereby widening global inequalities. This has happened with the emissions trading system, is already seen under the green economy and will happen with any other future market we decide to establish where public goods can be bought and sold. These kind of ‘solutions’ are offered without a profound analysis of the problem. Simply “greenwashing” global investment will not lead to positive social outcomes, especially if the fruits of industry remain concentrated in the hands of the few. Capitalism and the neoliberal ideology have caused landgrabbing and the exploitation of people and planet for the sake of extending markets and maximizing profits. The use of biomass energy as an alternative to petroleum, a leading idea in the green economy, is progressing to what the Third World Network described as the biggest earth grab in 500 years. I have learned as an activist that the struggles for climate justice and social justice are very closely linked. Commodification of all aspects of life and leaving them to the market cannot be a solution, because doing so is at the heart of the problem.

Do we really want to live in a world in which DALYs can be bought and sold?

In the midst of discussions on the post-development framework, we should learn from the experience of the emissions trading system, to avoid repeating its mistakes in the field of global health. Averting carbon emissions and DALYs by technological solutions and market-based approaches will be a huge missed opportunity to achieve the needed system change for just and equitable societies, now and in the future.



NOTES:

[i] The globally accepted limit of 2°C – coinciding with a carbon atmospheric concentration of 450 ppm – is not set by scientists, but agreed to by our political leaders. This limit was set despite calls from civil society and many low-income countries to limit global warming to 1,5°C (350 ppm) or even 1°C (300 ppm).

[ii] In order to have a 50% chance of keeping the global mean temperature rise below 2°C relative to pre-industrial levels, atmospheric GHG concentrations must stabilise below 450ppm CO2 equivalence. Stabilisation below 400ppm would increase the probability to roughly 66% to 90%. 

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One Response to Is a global DALY-credit market desirable?

  1. Dear Natalie, I enjoyed reading your toughts on the paper publishd by Luis Carrasco et al. I agree with you that the choice for “impact or cost-effectiveness” above and rather than for “values or ethics”, is in itself a a very value-guided choice. This may be case of choice of health care interventions or strategies by the ‘new’ 21st century philanthrocapitalist aid actors, It would sound as a prejudgment in itself thinking that supporting values means not considering impact. Besides, there has been a long debate on the reasons of confusing technical and allocative efficiency. More importantly, you have pinpointed the relevant political and/or ethical question to be raised here: when did we drop equity out of any of the equations?
    Best,
    Patrick

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