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Global Demographic Change and Climate Policies

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  • Gerlagh, Reyer

    (Tilburg University, School of Economics and Management)

  • Jaimes, Richard

    (Tilburg University, School of Economics and Management)

  • Motavasseli, Ali

    (Tilburg University, School of Economics and Management)

Abstract

Between 1950 and 2017, world average life expectancy increased from below-50 to above-70, while the fertility rate dropped from 5 to about 2.5. We develop and calibrate an analytic climate-economy model with overlapping generations to study the effect of such demographic change on capital markets and optimal climate policies. Our model replicates findings from the OLG-demography literature, such as a rise in households’ savings, and a declining rate of return to capital. We also find that demographic change raises the social cost of carbon, at 2020, from 28 euro/tCO2 in a model that abstracts from demography, to 94 euro/tCO2 in our calibrated model.
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  • 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.
    • Handle: RePEc:tiu:tiutis:7a4ee2a9-e025-4ec0-8bc8-f3bca71e57ab
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    Cited by:

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    2. Richard Jaimes, "undated". "Does idiosyncratic risk matter for climate policy?," Vniversitas Económica 19276, Universidad Javeriana - Bogotá.
    3. Jaimes, Richard, 2023. "Does idiosyncratic risk matter for climate policy?," Environment and Development Economics, Cambridge University Press, vol. 28(4), pages 353-367, August.
    4. Reyer Gerlagh & Veronica Lupi & Marzio Galeotti, 2018. "Family Planning and Climate Change," CESifo Working Paper Series 7421, CESifo.

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    More about this item

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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