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Is faster economic growth compatible with reductions in carbon emissions? The role of diminished population growth

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  • Casey, Gregory
  • Galor, Oded

Abstract

We provide evidence that lower fertility can simultaneously increase income per capita and lower carbon emissions, eliminating a trade-off central to most policies aimed at slowing global climate change. We estimate the effect of lower fertility on carbon emissions, accounting for the fact that changes in fertility patterns affect carbon emissions through three channels: total population, the age structure of the population, and economic output. Our analysis proceeds in two steps. First, we estimate the elasticity of carbon emissions with respect to population and income per capita in an unbalanced yearly panel of cross-country data from 1950–2010. We demonstrate that the elasticity with respect to population is nearly seven times larger than the elasticity with respect to income per capita and that this difference is statistically significant. Thus, the regression results imply that 1% slower population growth could be accompanied by an increase in income per capita of nearly 7% while still lowering carbon emissions. In the second part of our analysis, we use a recently constructed economic-demographic model of Nigeria to estimate the effect of lower fertility on carbon emissions, accounting for the impacts of fertility on population growth, population age structure, and income per capita. We find that by 2100 C.E. moving from the medium to the low variant of the UN fertility projection leads to 35% lower yearly emissions and 15% higher income per capita. These results suggest that population policies could be part of the approach to combating global climate change.

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  • Casey, Gregory & Galor, Oded, 2017. "Is faster economic growth compatible with reductions in carbon emissions? The role of diminished population growth," MPRA Paper 76164, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:76164
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    Cited by:

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    2. Luis Diaz-Serrano & Giorgos Kallis, 2022. "Political leaders with professional background in business and climate outcomes," Climatic Change, Springer, vol. 172(1), pages 1-20, May.
    3. Magazzino, Cosimo & Drago, Carlo & Schneider, Nicolas, 2023. "Evidence of supply security and sustainability challenges in Nigeria’s power sector," Utilities Policy, Elsevier, vol. 82(C).
    4. Savona, Maria & Ciarli, Tommaso, 2019. "Structural Changes and Sustainability. A Selected Review of the Empirical Evidence," Ecological Economics, Elsevier, vol. 159(C), pages 244-260.
    5. Méjean, Aurélie & Pottier, Antonin & Zuber, Stéphane & Fleurbaey, Marc, 2023. "Opposite ethical views converge under the threat of catastrophic climate change," Ecological Economics, Elsevier, vol. 212(C).
    6. Gerlagh, Reyer & Jaimes, Richard & Motavasseli, Ali, 2017. "Global Demographic Change and Climate Policies," Other publications TiSEM 7a4ee2a9-e025-4ec0-8bc8-f, Tilburg University, School of Economics and Management.
    7. Antonin Pottier & Marc Fleurbaey & Aurélie Méjean & Stéphane Zuber, 2021. "Climate change and population: an assessment of mortality due to health impacts," PSE-Ecole d'économie de Paris (Postprint) halshs-03048602, HAL.
    8. Francesco Nicolli & Marianna Gilli & Francesco Vona, 2022. "Inequality and Climate Change: Two Problems, One Solution?," Working Papers 2022.32, Fondazione Eni Enrico Mattei.
    9. Yang Zhou & Jintao Fu & Ying Kong & Rui Wu, 2018. "How Foreign Direct Investment Influences Carbon Emissions, Based on the Empirical Analysis of Chinese Urban Data," Sustainability, MDPI, vol. 10(7), pages 1-19, June.
    10. Peter K. Kruse-Andersen, 2019. "Directed Technical Change, Environmental Sustainability, and Population Growth," Discussion Papers 19-12, University of Copenhagen. Department of Economics.
    11. Antonin Pottier & Marc Fleurbaey & Stéphane Zuber, 2020. "Climate change and population: an integrated assessment of mortality due to health impacts," Documents de travail du Centre d'Economie de la Sorbonne 20029, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    12. Zuzanna Brzozowska & Ekaterina Zhelenkova & Stuart Gietel-Basten, 2023. "Population decline: Towards a rational, scientific research agenda," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 21(1), pages 1-11.
    13. O'Sullivan, Jane N., 2020. "The social and environmental influences of population growth rate and demographic pressure deserve greater attention in ecological economics," Ecological Economics, Elsevier, vol. 172(C).
    14. Sugiawan, Yogi & Managi, Shunsuke, 2019. "New evidence of energy-growth nexus from inclusive wealth," Renewable and Sustainable Energy Reviews, Elsevier, vol. 103(C), pages 40-48.
    15. Reyer Gerlagh & Veronica Lupi & Marzio Galeotti, 2023. "Fertility and climate change," Scandinavian Journal of Economics, Wiley Blackwell, vol. 125(1), pages 208-252, January.
    16. Ronald R. Kumar & Peter J. Stauvermann, 2019. "The Effects of a Revenue-Neutral Child Subsidy Tax Mechanism on Growth and GHG Emissions," Sustainability, MDPI, vol. 11(9), pages 1-23, May.
    17. Zhang, Lulu & Xiong, Lichun & Cheng, Baodong & Yu, Chang, 2018. "How does foreign trade influence China’s carbon productivity? Based on panel spatial lag model analysis," Structural Change and Economic Dynamics, Elsevier, vol. 47(C), pages 171-179.
    18. Kruse-Andersen, Peter Kjær, 2023. "Directed technical change, environmental sustainability, and population growth," Journal of Environmental Economics and Management, Elsevier, vol. 122(C).

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    More about this item

    Keywords

    Climate Change; Demography; Economic Growth;
    All these keywords.

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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