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A Dynamic Analysis of Human Welfare in a Warming Planet

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Author Info
Humberto Llavador (Universitat Pompeu Fabra)
John E. Roemer () (Yale University)
Joaquim Silvestre (University of California, Davis)

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Abstract

Climate science indicates that climate stabilization requires low GHG emissions. Is this consistent with nondecreasing human welfare? Our welfare index, called quality of life (QuoL), emphasizes education, knowledge, and the environment. We construct and calibrate a multigenerational model with intertemporal links provided by education, physical capital, knowledge and the environment. We reject discounted utilitarianism and adopt, first, the Intergenerational Maximin criterion, and, second, Human Development Optimization, that maximizes the QuoL of the first generation subject to a given future rate of growth. We apply these criteria to our calibrated model via a novel algorithm inspired by the turnpike property. The computed paths yield levels of QuoL higher than the year 2000 level for all generations. They require the doubling of the fraction of labor resources devoted to the creation of knowledge relative to the reference level, whereas the fractions of labor allocated to consumption and leisure are similar to the reference ones. On the other hand, higher growth rates require substantial increases in the fraction of labor devoted to education, together with moderate increases in the fractions of labor devoted to knowledge and the investment in physical capital.

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Publisher Info
Paper provided by Cowles Foundation, Yale University in its series Cowles Foundation Discussion Papers with number 1673R.

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Length: 69 pages
Date of creation: Apr 2009
Date of revision:
Handle: RePEc:cwl:cwldpp:1673r

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Related research
Keywords: Quality of life; Climate change; Education; Maximin; Growth;

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Find related papers by JEL classification:
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounting

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  4. John E. Roemer, 2005. "Intergenerational Justice and Sustainability under the Leximin Ethic," Cowles Foundation Discussion Papers 1512, Cowles Foundation, Yale University. [Downloadable!]
  5. D. Gale Johnson, 2000. "Population, Food, and Knowledge," American Economic Review, American Economic Association, vol. 90(1), pages 1-14, March. [Downloadable!] (restricted)
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  7. Rebelo, Sergio, 1991. "Long-Run Policy Analysis and Long-Run Growth," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 500-521, June. [Downloadable!] (restricted)
    Other versions:
  8. Joaquim Silvestre, 2002. "Progress and conservation under Rawls's maximin principle," Social Choice and Welfare, Springer, vol. 19(1), pages 1-27. [Downloadable!] (restricted)
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  12. repec:bep:evoice:4:2007:3:2 is not listed on IDEAS
  13. Humberto Llavador & John E. Roemer & Joaquim Silvestre, 2009. "Intergenerational Justice when Future Worlds Are Uncertain," Cowles Foundation Discussion Papers 1692, Cowles Foundation, Yale University. [Downloadable!]
    Other versions:
  14. Simon Dietz & Chris Hope & Nicholas Stern & Dimitri Zenghelis, 2007. "REFLECTIONS ON THE STERN REVIEW (1)
    A Robust Case for Strong Action to Reduce the Risks of Climate Change    ," World Economics, World Economics, Economic & Financial Publishing, PO Box 69, Henley-on-Thames, Oxfordshire, United Kingdom, RG9 1GB, vol. 8(1), pages 121-168, January. [Downloadable!]
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