26 September 2015

Five-year survival rates: another Mickey Mouse indicator

Health statistics are tricky and, when they're used to make a case for increasing or diverting funding, we need to be especially vigilant:

Research published in the European Journal of Cancer shows the UK has the worst survival rates for cancer in western Europe, with rates one third lower than those of Sweden. UK cancer survival worst in western Europe, 'Daily Telegraph', 26 September
The article gives examples:

Five-year breast cancer survival was 79.1 per cent in England, 78.5 per cent in Scotland, and 78.2 per cent in Wales. In Sweden the figure is 86 per cent, with an European average of 81.8 per cent. In England, 80.3 per cent of men with prostate cancer were alive five years later, compared with 90.2 per cent in Austria, 90 per cent in Finland and a European average of 83.4 per cent.
At first glance, this seems an indictment of the UK's approach to diagnosing and treating cancer. But the five-year survival rate needs interpretation: it is the proportion of patients still living five years after diagnosis. We can improve the five-year survival rate by better treatment, which is unambiguously good, or by earlier diagnosis, which is far more questionable. Earlier diagnosis can simply mean more intervention and more treatment (and more side effects), but does not necessarily lead to a reduction in the cancer mortality rate - which is a far better indicator of healthcare efficiency than the five-year survival rate.

A Social Policy Bond regime aiming at improving the overall health of a population would refine and target more-robust indicators, such as mortality and longevity, and would do so impartially. For more about Health Bonds, click here. For more about how misleading are five-year survival rates click here or here.

22 September 2015

Volkswagen: no surprise

[D]rivers of almost half a million cars in the US have now suddenly found that they are driving round vehicles which are a lot worse for the environment than they thought. The rigged tests masked the fact that these cars emit up to 40 times the legal limit of pollutants. And now VW has said that as many as 11 million cars worldwide could be affected. VW scandal threatens 'Made in Germany' brand, BBC, 22 September

Social Policy Bonds have big advantages over conventional policy when addressing a problem like air pollution caused by millions of point sources. Conventional policy cannot effectively measure the pollutants emitted by any more than a few major sources, and then reward or punish the emitters accordingly. What might work for power stations or cement factories won't work for cars or households. Corporations (like Volkswagen) have every incentive to cheat the system, and individuals have every incentive to go along such cheating. The bureaucratic burden of measuring the pollution generated by millions of machines or people is not just a misallocation of resources: it's likely to be intrusive and divisive. Plus, it's not a very exciting job.

Social Policy Bonds can help. They're at once both more direct and more versatile. So instead of targeting the air pollution generated by millions of point sources, they can target an array of pollutants, weighted according to lethality, and let the market for the bonds work out, dynamically, the best ways of achieving our pollution reduction goal. I first wrote about this approach back in 1991. My views haven't changed since then, so I won't repeat them here.

21 September 2015

The root causes of war: don't bother

A Social Policy Bond regime makes inescapable the need to think about what we want to achieve. This should be an essential discipline, but in some instances it's never followed. There's much obfuscation - deliberate or not - and far too much attention given to identifying supposed 'root causes' at the expense of effective policy.

Take violent political conflict. It's still going on, killing, maiming and making homeless millions of people every year. The numbers so affected might be falling, but that says nothing (short pdf) about possible major violent future events. We could spend years analysing past outbreaks of war, but still never get close to identifying root causes in ways that forestall future outbreaks. Society is just too complex, diverse and fast-changing. Policymakers should begin by specifying society's desired outcomes, rather than distracting or indulging ourselves by trying to identify root causes - except perhaps for simple, relatively static, policy environments.

A bond regime wouldn't try to identify the root causes of war, which are a moving target anyway. Instead it would start by specifying exactly the outcomes we want to achieve, and then injecting market incentives into achieving those outcomes. Conflict Reduction Bonds are the means by which I propose we begin to end all war for all time. It's not idealism. It's giving incentives to motivated people to find solutions, rather than simply to turn up to work for a bureaucracy, corrupt or not.

10 September 2015

Climate change: current policy is doomed to fail

[T]he representation of clouds in climate models (and of the water vapour which is intimately involved with cloud formation) is such as to amplify the forecast warming from increasing atmospheric CO2—on average over most of the models—by a factor of about three. In other words, two-thirds of the forecast rise in temperature derives from this particular model characteristic. Despite what the models are telling us—and perhaps because it is models that are telling us—no scientist close to the problem and in his right mind, when asked the specific question, would say that he is 95 per cent sure that the effect of clouds is to amplify rather than to reduce the warming effect of increasing CO2. If he is not sure that clouds amplify global warming, he cannot be sure that most of the global warming is a result of increasing CO2. Uncertainty, scepticism and the climate issue, Garth W Paltridge, in 'Climate Change: the Facts,' edited by Alan Moran, 2015
The 'forecast rise in temperature' referred to by Professor Paltridge is that made by the Intergovernmental Panel on Climate Change (IPCC). The book in which Prof Paltridge's essay appears is a collection of skeptical essays, and one which, like the website Watts up with that? is at first persuasive to non-scientists like myself. But then so too are most of the arguments on the other side of the debate; the ones agreeing with what has become the mainstream view, that anthropogenic climate change is happening. (There's also an equally convincing website: RealClimate.org.) 

We know that science is not a consensual process. So what are policy people to make of these irreconcilable differences? We can all agree that there are uncertainties, not only about the fact of climate change but also about the details: the magnitudes, the causes, the impacts. We can also agree that these uncertainties are not going to disappear any time soon. Conventional policy has a hard time trying to deal with such uncertainty. It seeks to identify, with a high degree of certainty, those causes, magnitudes and impacts of climate change, then come up with something to tackle the root causes. Conventional policy has identified greenhouse gases as those causes and keeps coming up with measures aimed at cutting emissions of those gases into the atmosphere. Or, more cynically, aimed at pretending that such cuts in emissions will happen: these measures are unpopular, divisive and expensive. As well, the costs are all upfront and the climate benefits - there's almost universal agreement about this too - will be slow in coming and probably not very significant. (It's likely any cuts will have beneficial effects on things other than climate, but they are not driving policy.)

Conventional policy, then, is failing. I think there's a broad consensus about that too. Some think it's too little; others think it's too drastic. But either way, it's not good enough. Even in their own terms, Kyoto and subsquent agreements are failing.

So here's my suggestion. Instead of targeting what might or might not be the cause of what might or might not be anthropogenic climate change, why not target exactly what we want to achieve? It could be an array of ranges within which physical, biological, social and financial indicators must fall, for a sustained period. We could aim for relative and sustained stability in those indicators that are important to plant, animal and human life. A Climate Stability Bond regime would do this, regardless of what we currently think is driving the climate. It is not only clouds (see excerpt above) whose contribution is uncertain: it's the relative contribution of the various greenhouse gases or any of a large number of other variables, anthropogenic or not. The conventional approach, which looks for root causes before doing anything significant, isn't working, and cannot work when our knowledge of such causes is expanding rapidly. Climate Stability Bonds, as well as being versatile in the range of variables that they target, would reward people who achieve our goals, whoever they are and however they do so. Bondholders would do the work of identifying the causes and effects of climate change on a continuous basis. They would research, explore and implement those measures that will achieve the best return on our scarce resources. They will, very probably, implement a very broad range of measures on a diverse, adaptive basis: something that no government or supra-national body can do. 

There are things that governments can do well. Indeed, there are things that only governments can do at all. These usually are areas in which causal relationships are clear and stable, and the benefits of an established approach are large and unchallenged. None of these conditions apply to climate change. It's time for a different approach.