As the biological basis of more diseases are fully revealed, and the drugs targeting medical problems become more focused and effective, more patients are finding themselves on costlier specialty medicines. At the same time, consumers find themselves paying a growing portion of their drug bills out of pocket as the structure of insurance changes. These two developments have combined to result in significant consumer hardship.

In response to these trends, there has been political pressure to enact policies giving federal and state governments authority to set drug prices or limit price increases. However, these policies could have the unintended consequence of reducing the incentive to develop more effective drugs.

In Europe, government price-setting authorities systematically overpay for some older, less innovative drugs while reducing the prices of and access to newer, more significant breakthroughs. Many worry that enacting a similar policy in the United States would reduce the profitability of new, innovative research endeavors.

We believe that certain regulatory reforms can address these concerns and encourage more robust competition within the drug market. These policies would allow prices to more easily adjust to reflect how medicines are prescribed and the outcomes they deliver, and thus would help control rising spending and reduce the burden of drug costs for consumers. One way to make drug pricing more competitive is to implement selling models that tie the price of drugs more closely to the usefulness of the clinical setting in which they are being prescribed. However, existing regulations obstruct this type of market-oriented approach.

Pricing Based On Indication And Outcomes

The Centers for Medicare and Medicaid Services (CMS) recently announced that as early as 2017, it plans to pursue changes in the way Medicare pays for injectable drugs under its Part B program to give drug makers more flexibility to price products based on indications and outcomes. Yet the Medicare program left open how the relative value of different indications would be determined. Would drug makers be free to vary prices based on clinical demand and the benefits being offered in different clinical settings? Or as the rule suggests, will CMS try to influence these conclusions with an assessment of clinical value?

CMS’ proposed rule also does not address several challenges associated with a value-based pricing framework. For example, the proposal did not address the small molecule drugs that are the focus of much of the price scrutiny, only injectable drugs paid for as part of the medical benefit. Moreover, enabling such a framework for value-based pricing would require simultaneous regulatory reforms at the Food and Drug Administration (FDA), as well as the Office of the Inspector General. Because the impediments to this sort of policy effort cut across multiple agencies, it will likely require a legislative remedy to fully enable.

Inside CMS, enabling drug makers to adjust prices based on the purpose for which medicines are being prescribed will require changes to the existing rules that govern drug pricing. For example, federal regulators will need to relax the way that they implement current price-setting constructs like the calculation for Medicaid best price, the ceiling price for the 340B program, and the reporting rules for Medicare’s Part B average sales price. These rules complicate the ability of companies to price the same drug differently, based on how it’s being prescribed, or to enter into “value-based’ contracts that tie drug prices and discounts to measures of how a population of patients benefit from a given treatment.

Take, for example, the Medicaid Best Price rules. Best price is the lowest manufacturer price paid for a drug by any purchaser. It’s defined by the Medicaid statute as “any wholesaler, retailer, provider, health maintenance organization, or nonprofit or government entity” with some exceptions (Note 1). In short, it’s the cheapest price at which a drug is sold. A drug’s reported best price is required to reflect all discounts, rebates, and other pricing adjustments. It’s the benchmark that the government uses to make sure that state Medicaid programs are receiving the lowest price for which a drug is being offered to any purchaser.

Under these rules, if a drug maker enters into a contract with a private health plan to discount a drug based on how it’s being used (or the clinical results that it achieves) then the discount that’s offered when the drug is used in settings that are judged to yield less value would become the new benchmark for calculating the Medicaid best price. The rebates offered to a private insurer under the terms of just one value-based contract would establish the new price offered to all Medicaid programs, regardless of whether or not the Medicaid plans were also entering into similar contracting arrangements. So Medicaid plans that did not contract to pay higher prices when drugs were used in certain higher value settings, and lower prices when they were prescribed for lower value indications, would nonetheless pay a price for all of their prescriptions that reflected the lowest price offered under a value-based arrangement. This new Medicaid price could, in turn, influence other price schedules.

Consider a drug maker that offered a 90 percent discount on a drug when it didn’t produce any of its expected benefit. Under current rules, that deeply discounted price would become the new Medicaid best price, but not necessarily the blended price that reflects the average price being paid under a contract where the price fluctuated based on how a drug was being prescribed. This could create a significant disincentive for manufacturers to offering indication and outcome-based prices. For these reasons, enabling drug makers to adjust prices based on these parameters will require changes to rules on how drug makers must track and report prices to the government under Medicaid and to the 340B drug program.

Similar challenges to value-based pricing are posed by Medicare’s calculation of average sales price (ASP) as part of its framework for reimbursing injectable drugs paid under Part B. The ASP is defined as a manufacturer’s sales of a drug to all U.S. purchasers in a calendar quarter divided by the total number of units of the drug sold by the manufacturer in that same quarter (Note 2). The ASP is net of any price concessions, such as volume discounts, prompt pay discounts, cash discounts, free goods contingent on purchase requirements, chargebacks, and rebates other than those obtained through the Medicaid drug rebate program.

Manufacturers that offer discounts under commercial, value-based contracts would probably face reductions in their calculated ASP as a result of the concessions. In turn, they would see their reimbursement under Medicare Part B also decline, regardless of whether Medicare entered into the same outcome or indication-based contracts. Since the private market pegs its own pricing off of the ASP, a single value-based contract that served to lower the ASP could have the effect of reducing a drug maker’s reimbursement across every other contract. For drug manufacturers, this is another disincentive to entering into these arrangements.

Moreover, without significant regulatory changes, it is unlikely that Medicare would participate in a value-based system due to both legal and practical limitations. In the past, CMS has avoided these contracting arrangements when sponsors have approached the agency with such proposals. Even if CMS asserts the legal authority to enter into such arrangements, it is unclear whether the agency has the informational capacity to implement them. Managing a value-based system would require careful tracking of how and when drugs are prescribed, and collecting information to measure outcomes. Currently, CMS probably lacks the capacity to carry out this level of measurement and analysis. So for now, it will mostly be left to private payers to pursue value-based arrangements.

Reducing Regulatory Barriers

To reduce obstacles to value-based pricing, new regulations would need to be issued to clarify how drug makers, insurance plans, and health systems can rationalize value-based and indication-based contracts with their price reporting calculations. Medicare probably has the requisite authority to do so under constructs created by the Affordable Care Act. Additionally, Congress could provide clear authority and direction through legislation addressing these policy opportunities.

The Medicare and Medicaid programs could exempt value-based contracts that meet certain criteria from the requirement that the resulting prices, and the discounts, be used toward calculating Medicaid best price. CMS recently signaled that it had the existing authority to address some of these issues through a pilot program designed under the Center for Medicare and Medicaid Innovation (CMMI). Such a program could enable commercial health plans to adapt their reporting obligations to test how value-based and indication-based contracts would impact overall spending and outcomes. While the proposed regulation lays out Medicare’s general intent to pursue these strategies, it does not outline the parameters needed in order to go forward.

Some of the regulatory discretion that is required to change drug-pricing systems may be outside of the Medicare agency’s direct control. For example, the Office of the Inspector General (OIG) would have to change its interpretation of anti-kickback rules to enable drug makers to provide discounts based on the clinical indications for which drugs are prescribed, as well as the outcomes they deliver. Otherwise, under the OIG’s existing interpretation of its authority, these arrangements could be perceived as inducements to prescribing.

Fostering outcomes-based and indication-based pricing will also require FDA to adapt some of its existing rules and practices. Currently, drug makers are largely prevented from offering price concessions based on how a drug is used unless all of the prescribing options are listed precisely and completely on the drug’s label. When a drug maker secures approval for a new medicine, what appears on its drug label forms the basis for any outcomes-based contracts with health plans or Pharmacy Benefit Managers (PBMs), even if it would make more sense to contract for drugs based on measuring outcomes for which the drug is not explicitly approved. So far, FDA’s sometimes-purposeful ambiguity over the scope of its authority in these areas of commercial speech creates enough legal risk to discourage these sorts of business interactions.

In order to enable these arrangements, FDA would have to concede that commercial, contract-related communications constitute protected speech under the First Amendment and thus are not subject to the agency’s active regulation. At the least, FDA could stipulate that it does not forfeit its authority to regulate these and similar forms of commercial communication, but as a matter of policy will exercise enforcement discretion when it comes to value-based contracts and their negotiation. Better still, Congress can more firmly establish the same safe harbors in legislation, rather than leaving it up to FDA to stipulate these important legal principles in non-binding guidance or regulation.

Another impediment to contracting based on outcomes measurement is uncertainty over the FDA’s regulation of pre-approval communication. FDA prohibits pre-approval communication, but has not specified whether these restrictions extend to discussions between drug makers and drug purchasers that are conducted as part of contracting discussions prior to a drug’s launch. Pre-market commercial discussions are an important part of the ability to negotiate these complex, value-based contracts, as the contracts would need to be put into place at the time of approval. Because targeted pre-approval conversations between manufacturers and health plans are not inherently promotional, FDA as a matter of policy should not seek to regulate them.

Absent these collective regulatory impediments, drug makers and those who pay for medicines could have more ability and incentive to engage in price negotiations based on the indication for which a medicine is being prescribed by providers and the variable outcomes that it delivers to patients. In the absence of reforms to make drug pricing more competitive, the political alternative may well be regulated pricing. This approach would end up skewing investment because it would inevitably allocate capital based on political priorities rather than scientific priorities and clinical goals.

The discussion over drug prices is driven by a fair degree of politics, but the debate arose because of secular changes in the political economy of health care, and increasing costs to consumers. These challenges need to be addressed with constructive measures that foster access to and competitive pricing of medicines, while preserving market-based rewards for innovation, and the efficient allocation of capital to these efforts.

Note 1: Exceptions to the best price include prices that are charged to certain federal purchasers (sales made through federal supply schedule, single award contract prices of any federal agency, federal depot prices, and prices charged to the Department of Defense, Department of Veterans Affairs, Indian Health Service, and the Public Health Service), eligible state pharmaceutical assistance programs, and state-run nursing homes.

Note 2: Section 1847A(c) of the Social Security Act (the Act), as added by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), P.L. No. 108-173, defines an ASP as a manufacturer’s sales of a drug to all purchasers in the United States in a calendar quarter divided by the total number of units of the drug sold by the manufacturer in that same quarter.

Editor's Note: Both authors consult with and invest in life science and healthcare services companies.

Editor's note: This piece originally appeared in Health Affairs Blog.

Key messages and Policy Pointers

• Given the stalemate in U.N. climate negotiations, the best arena to strike a workable deal is among the members the Major Economies Forum on Energy and Climate (MEF).

• The 13 MEF members—including the EU-27 (but not double-counting the four EU countries that are also individual members of the MEF)—account for 81.3 percent of all global emissions.

• This proposal devises a fair compromise to break the impasse to develop a science-based approach for fairly sharing the carbon budget in order to have a 75 percent chance of avoiding dangerous climate change.

• To increase the likelihood of a future climate agreement, carbon accounting must shift from pro­duction-based inventories to consumption-based ones.

• The shares of a carbon budget to stay below 2 °C through 2050 are calculated by cumulative emis­sions since 1990, i.e. according to a short-horizon polluter pays principle, and national capability (income), and allocated to MEF members through emission rights. This proposed fair compromise addresses key concerns of major emitters.

• According to this accounting, no countries have negative carbon budgets, there is substantial time for greening major developing economies, and some developed countries need to institute very rapid reductions in emissions.

• To provide a ‘green ladder’ to developing countries and to ensure a fair global deal, it will be crucial to agree how to extend sufficient and predictable financial support and the rapid transfer of technology.

The most urgent and complicated ethical issue in addressing climate change is how human society will share the work of reducing greenhouse gases (GHG) emissions. Looking ahead to 2015 when a new international treaty on climate change should be agreed upon, we fear we are headed towards a train wreck.

Key developed countries have made it clear they will not accept any regime excluding emerging economies such as China and Brazil, and the U.S. and other ‘umbrella’ countries are calling for only voluntary, bottom-up com­mitments. Yet the major developing countries have made equity the sine qua non for any kind of agreement: they will not take on mandatory emission reduction targets with perceived implications for their economic growth and social development, unless the wealthier countries commit to deep emissions cuts and act first.

These entrenched positions between the different blocs have led to the current impasse, but as Nobel laureate economist and philosopher, Amaryta Sen pointed out, the perfect agreement that never happens is more unjust than an imperfect one that is obtainable.

What is a fair and feasible way to break the impasse, given that all efforts are faltering? The most difficult task is determining a country’s fair share of the required emissions reductions in a way that is politically feasible. After 20 years of negotiations and gridlock, it is clear that many conflicting principles of equity are brought to the table, so a solution will have to be based on some kind of ‘negotiated justice,’ or a ‘fair compromise,’ which will not be one preferred by just one group of countries.

A few basic requirements must be met. A feasible, fair and effective climate agreement must involve the largest emitters from both the developed and developing countries. Such an agreement must find a way to engage the latter without penalizing them or the former countries too much. In order to secure progress, above all it must be acceptable to the two world superpowers and top carbon emitters, China and the U.S.; with this leadership, in fact, other emitters will likely follow. This agreement could be forged in a ‘plurilateral’ setting where a limited number of countries come together first, and then be brought into the formal U.N. negotiations as the basis for a future deal, perhaps by 2015.

How can future negotiations on emissions reductions overcome such political inertia? We suggest that taking three manageable steps to a fair compromise will unlock progress.

First, negotiate a core agreement between the 13 members in the MEF (including the EU-27), which accounts for 81.3 percent of all global emissions. This makes the negotiations feasible, where deals can be struck that would be impossible in the vast U.N. forum.

Second, use consumption-based emissions accounting, which is much fairer than the cur­rent production/territorial-based accounting that all past agreements and negotiations have been based upon. These are relatively new numbers developed by the Norwegian research center CICERO, and have been vetted by the top scientific journals and increasingly utilized by policymakers.

Third, forge a fair compromise to allocate emissions rights. We propose a compromise based on a short-horizon ‘polluter pays principle’ and an indicator of national capability (income).

This third step in particular is a genuine compromise for both developed and developing countries, but it is re­quired to break the current gridlock. Each MEF member gives and takes something from this simple, workable framework and all gain a liveable planet in the future.

Throughout the paper we first explain why counting carbon emissions by consumption is far better and the im­plications of doing so, and we then introduce the MEF and why it is a promising arena for forging a bold compro­mise like the one so badly needed before 2015. We then calculate what the numbers actually mean for that group of countries and develop a proposal for a fair compromise that embodies a feasible but fair operationalization of the central equity principles of the U.N. climate treaty, i.e. action by countries according to their responsibility and capability. We conclude with a discussion of how a start in the MEF could lead to a new framework being brought into those broader negotiations.

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INTRODUCTION

In August, 2010 the government of Kenya adopted a new constitution. This followed a referendum in which an overwhelming majority of Kenyans voted for change. The decisive impetus for reform came from the widespread violence and political crisis that followed the 2007 election. While claims of electoral fraud provided the immediate catalyst for violence, the deeper causes were to be found in the interaction of a highly centralized ‘winner-take-all’ political system with deep social disparities based in part on group identity (Hanson 2008).

Provisions for equity figure prominently in the new constitution. Backed by a bill of rights that opens the door to legal enforcement, citizenship rights have been strengthened in many areas,including access to basic services. ‘Equitable sharing’ has been introduced as a guiding principle for public spending. National and devolved governments are now constitutionally required to redress social disparities, target disadvantaged areas and provide affirmative action for marginalized groups.

Translating these provisions into tangible outcomes will not be straightforward. Equity is a principle that would be readily endorsed by most policymakers in Kenya and Kenya’s citizens have provided their own endorsement through the referendum. However, there is an ongoing debate over what the commitment to equity means in practice, as well as over the pace and direction of reform. Much of that debate has centered on the constitutional injunction requiring ‘equitable sharing’ in public spending.

On most measures of human development, Kenya registers average outcomes considerably above those for sub-Saharan Africa as a region. Yet the national average masks extreme disparities—and the benefits of increased prosperity have been unequally shared.

There are compelling grounds for a strengthened focus on equity in Kenya. In recent years, the country has maintained a respectable, if less than spectacular, record on economic growth. Social indicators are also on an upward trend. On most measures of human development, Kenya registers average outcomes considerably above those for sub-Saharan Africa as a region. Yet the national average masks extreme disparities—and the benefits of increased prosperity have been unequally shared. Some regions and social groups face levels of deprivation that rank alongside the worst in Africa. Moreover, the deep fault lines running through society are widely perceived as a source of injustice and potential political instability.

High levels of inequality in Kenya raise wider concerns. There has been a tendency in domestic debates to see ‘equitable sharing’ as a guiding principle for social justice, rather than as a condition for accelerated growth and enhanced economic efficiency. Yet international evidence strongly suggests that extreme inequality—especially in opportunities for education— is profoundly damaging for economic growth. It follows that redistributive public spending has the potential to support growth.

The current paper focuses on a group of 12 counties located in Kenya’s Arid and Semi-Arid Lands (ASALs). They are among the most disadvantaged in the country. Most are characterized by high levels of income poverty, chronic food insecurity and acute deprivation across a wide range of social indicators.

Nowhere is the deprivation starker than in education. The ASAL counties account for a disproportionately large share of Kenya’s out-of-school children, pointing to problems in access and school retention. Gender disparities in education are among the widest in the country. Learning outcomes for the small number of children who get through primary school are for the most part abysmal, even by the generally low national average standards.

Unequal public spending patterns have played no small part in creating the disparities that separate the ASAL counties from the rest of Kenya—and ‘equitable sharing’ could play a role in closing the gap. But what would a more equitable approach to public spending look like in practice?

This paper addresses that question. It looks in some detail at education for two reasons. First, good quality education is itself a powerful motor of enhanced equity. It has the potential to equip children and youth with the skills and competencies that they need to break out of cycles of poverty and to participate more fully in national prosperity. If Kenya is to embark on a more equitable pattern of development, there are strong grounds for prioritizing the creation of more equal opportunities in education. Second, the education sector illustrates many of the wider challenges and debates that Kenya’s policymakers will have to address as they seek to translate constitutional provisions into public spending strategies. In particular, it highlights the importance of weighting for indicators that reflect need in designing formulae for budget allocations.

Our broad conclusion is that, while Kenya clearly needs to avoid public spending reforms that jeopardize service delivery in wealthier counties, redistributive measures are justified on the grounds of efficiency and equity.

The paper is organized as follows. Part 1 provides an overview of the approach to equity enshrined in the constitution. While the spirit of the constitution is unequivocal, the letter is open to a vast array of interpretations. We briefly explore the implications of a range of approaches. Our broad conclusion is that, while Kenya clearly needs to avoid public spending reforms that jeopardize service delivery in wealthier counties, redistributive measures are justified on the grounds of efficiency and equity. Although this paper focuses principally on basic services, we caution against approaches that treat equity as a matter of social sector financing to the exclusion of growth-oriented productive investment.

Part 2 provides an analysis of some key indicators on poverty, health and nutrition. Drawing on household expenditure data, the report locates the 12 ASAL counties in the national league table for the incidence and depth of poverty. Data on health outcomes and access to basic services provide another indicator of the state of human development. While there are some marked variations across counties and indicators, most of the 12 counties register levels of deprivation in poverty and basic health far in excess of those found in other areas.

Part 3 shifts the focus to education. Over the past decade, Kenya has made considerable progress in improving access to basic education. Enrollment rates in primary education have increased sharply since the elimination of school fees in 2003. Transition rates to secondary school are also rising. The record on learning achievement is less impressive. While Kenya lacks a comprehensive national learning assessment, survey evidence points to systemic problems in education quality. In both access and learning, children in the ASAL counties—especially female children—are at a considerable disadvantage. After setting out the national picture, the paper explores the distinctive problems facing these counties.

In Part 4 we look beyond Kenya to wider international experience. Many countries have grappled with the challenge of reducing disparities between less-favored and more-favored regions. There are no blueprints on offer. However, there are some useful lessons and guidelines that may be of some relevance to the policy debate in Kenya. The experience of South Africa may be particularly instructive given the weight attached to equity in the post-apartheid constitution.

Part 5 of the paper explores a range of approaches to financial allocations. Converting constitutional principle into operational practice will require the development of formulae-based approaches. From an equitable financing perspective there is no perfect model. Any formula that is adopted will involve trade-offs between different goals. Policymakers have to determine what weight to attach to different dimensions of equity (for example, gender, income, education and health), the time frame for achieving stated policy goals, and whether to frame targets in terms of outcomes or inputs. These questions go beyond devolved financing. The Kenyan constitution is unequivocal in stipulating that the ‘equitable sharing’ provision applies to all public spending. We therefore undertake a series of formula-based exercises illustrating the allocation patterns that would emerge under different formulae, with specific reference to the 12 ASAL focus counties and to education.

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The promise of geoengineering is placing average global temperature under human control, and is thus considered a powerful instrument for the international community to deal with global warming. While great energy has been devoted to learning more about the natural systems that it would affect, questions of political nature have received far less consideration. Taking as a given that regional effects will be asymmetric, the nations of the world will only give their consent to deploying this technology if they can be given assurances of a fair compensation mechanism, something like an insurance policy. The question of compensation reveals that the politics of geoengineering are far more difficult than the technical aspects.

What is Geoengineering?

In June 1991, Mount Pinatubo exploded, throwing a massive amount of volcanic sulfate aerosols into the high skies. The resulting cloud dispersed over weeks throughout the planet and cooled its temperature on average 0.5° Celsius over the next two years. If this kind of natural phenomenon could be replicated and controlled, the possibility of engineering the Earth’s climate is then within reach.

Spraying aerosols in the stratosphere is one method of solar radiation management (SRM), a class of climate engineering that focuses on increasing the albedo, i.e. reflectivity, of the planet’s atmosphere. Other SRM methods include brightening clouds by increasing their content of sea salt. A second class of geo-engineering efforts focuses on carbon removal from the atmosphere and includes carbon sequestration (burying it deep underground) and increasing land or marine vegetation. Of all these methods, SRM is appealing for its effectiveness and low costs; a recent study put the cost at about $5 to $8 billion per year.¹

Not only is SRM relatively inexpensive, but we already have the technological pieces that assembled properly would inject the skies with particles that reflect sunlight back into space. For instance, a fleet of modified Boeing 747s could deliver the necessary payload. Advocates of geoengineering are not too concerned about developing the technology to effect SRM, but about its likely consequences, not only in terms of slowing global warming but the effects on regional weather. And there lies the difficult question for geoengineering: the effects of SRM are likely to be unequally distributed across nations.

Here is one example of these asymmetries: Julia Pongratz and colleagues at the department of Global Ecology of the Carnegie Institution for Science estimated a net increase in yields of wheat, corn, and rice from SRM modified weather. However, the study also found a redistributive effect with equatorial countries experiencing lower yields.² We can then expect that equatorial countries will demand fair compensation to sign on the deployment of SRM, which leads to two problems: how to calculate compensation, and how to agree on a compensation mechanism.

The calculus of compensation

What should be the basis for fair compensation? One view of fairness could be that, every year, all economic gains derived from SRM are pooled together and distributed evenly among the regions or countries that experience economic losses.

If the system pools gains from SRM and distributes them in proportion to losses, questions about the balance will only be asked in years in which gains and losses are about the same. But if losses are far greater than the gains; then this would be a form of insurance that cannot underwrite some of the incidents it intends to cover. People will not buy such an insurance policy; which is to say, some countries will not authorize SRM deployment. In the reverse, if the pool has a large balance left after paying out compensations, then winners of SRM will demand lower compensation taxes.

Further complicating the problem is the question of how to separate gains or losses that can be attributed to SRM from regional weather fluctuations. Separating the SRM effect could easily become an intractable problem because regional weather patterns are themselves affected by SRM.  For instance, any year that El Niño is particularly strong, the uncertainty about the net effect of SRM will increase exponentially because it could affect the severity of the oceanic oscillation itself. Science can reduce uncertainty but only to a certain degree, because the better we understand nature, the more we understand the contingency of natural systems. We can expect better explanations of natural phenomena from science, but it would be unfair to ask science to reduce greater understanding to a hard figure that we can plug into our compensation equation.

Still, greater complexity arises when separating SRM effects from policy effects at the local and regional level. Some countries will surely organize better than others to manage this change, and preparation will be a factor in determining the magnitude of gains or losses. Inherent to the problem of estimating gains and losses from SRM is the inescapable subjective element of assessing preparation. 

The politics of compensation

Advocates of geoengineering tell us that their advocacy is not about deploying SRM; rather, it is about better understanding the scientific facts before we even consider deployment. It’s tempting to believe that the accumulating science on SRM effects would be helpful. But when we consider the factors I just described above, it is quite possible that more science will also crystalize the uncertainty about exact amounts of compensation. The calculus of gain or loss, or the difference between the reality and a counterfactual of what regions and countries will experience requires certainty, but science only yields irreducible uncertainty about nature.

The epistemic problems with estimating compensation are only to be compounded by the political contestation of those numbers. Even within the scientific community, different climate models will yield different results, and since economic compensation is derived from those models’ output, we can expect a serious contestation of the objectivity of the science of SRM impact estimation. Who should formulate the equation? Who should feed the numbers into it? A sure way to alienate scientists from the peoples of the world is to ask them to assert their cognitive authority over this calculus. 

What’s more, other parts of the compensation equation related to regional efforts to deal with SRM effect are inherently subjective. We should not forget the politics of asserting compensation commensurate to preparation effort; countries that experience low losses may also want compensation for their efforts preparing and coping with natural disasters.

Not only would a compensation equation be a sham, it would be unmanageable. Its legitimacy would always be in question. The calculus of compensation may seem a way to circumvent the impasses of politics and define fairness mathematically. Ironically, it is shot through with subjectivity; is truly a political exercise.

Can we do without compensation?

Technological innovations are similar to legislative acts, observed Langdon Winner.³ Technical choices of the earliest stage in technical design quickly “become strongly fixed in material equipment, economic investment, and social habit, [and] the original flexibility vanishes for all practical purposes once the initial commitments are made.” For that reason, he insisted, "the same careful attention one would give to the rules, roles, and relationships of politics must also be given to such things as the building of highways, the creation of television networks, and the tailoring of seeming insignificant features on new machines."

If technological change can be thought of as legislative change, we must consider how such a momentous technology as SRM can be deployed in a manner consonant with our democratic values. Engineering the planet’s weather is nothing short of passing an amendment to Planet Earth’s Constitution. One pesky clause in that constitutional amendment is a fair compensation scheme. It seems so small a clause in comparison to the extent of the intervention, the governance of deployment and consequences, and the international commitments to be made as a condition for deployment (such as emissions mitigation and adaptation to climate change). But in the short consideration afforded here, we get a glimpse of the intractable political problem of setting up a compensation scheme. And yet, if the clause were not approved by a majority of nations, a fair compensation scheme has little hope to be consonant with democratic aspirations.

¹McClellan, Justin, David W Keith, Jay Apt. 2012. Cost analysis of stratospheric albedo modification delivery systems. Environmental Research Letters 7(3): 1-8.

²Pongratz, Julia, D. B. Lobell, L. Cao, K. Caldeira. 2012. Nature Climate Change 2, 101–105.

³Winner, Langdon. 1980. Do artifacts have politics? Daedalus (109) 1: 121-136.

Event Information

This program was aired live on CSPAN.org » 

With the demand for its services constantly evolving, the Department of Veterans Affairs (VA) faces complex challenges in providing accessible care to America’s veterans. Amidst a history of long patient wait times, cost overruns, and management concerns, the VA recently conducted a sweeping internal review of its operations.  The result was the new MyVA program.

How will MyVA improve the VA’s care of veterans? What will it do restore public confidence in its efforts? What changes is the VA undergoing to address both internal concerns and modern challenges in veteran care? 

On June 20, Governance Studies at Brookings hosted VA Secretary Robert McDonald. Secretary McDonald described the VA’s transformation strategy and explained how the reforms within MyVA will impact veterans, taxpayers and other stakeholders. He addressed lessons learned not just for the VA but for all government agencies that strive to achieve transformation and improve service delivery.

This event was broadcast live on C-SPAN.

Join the conversation on Twitter at #VASec and @BrookingsGov

Audio

• Can the Department of Veterans Affairs be modernized?

Transcript

• Transcript (.pdf)

Event Materials

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