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Is economic growth compatible with reductions in carbon emissions? Investigating the impacts of diminished population growth

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  • Gregory Casey
  • Oded Galor

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 a version of the STIRPAT equation on an unbalanced yearly panel of cross-country data from 1950-2010. We demonstrate that the coefficient on population is nearly seven times larger than the coefficient on income per capita and that this difference is statistically significant. Thus, 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. The model was constructed to estimate the effect of lower fertility on economic growth, making it well-suited for this application. 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 strongly suggest that population policies could be a part of the approach to combating global climate change.

Suggested Citation

  • Gregory Casey & Oded Galor, 2016. "Is economic growth compatible with reductions in carbon emissions? Investigating the impacts of diminished population growth," Working Papers 2016-8, Brown University, Department of Economics.
  • Handle: RePEc:bro:econwp:2016-8
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    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. Gerlagh, Reyer & Jaimes, Richard & Motavasseli, Ali, 2017. "Global Demographic Change and Climate Policies," Discussion Paper 2017-035, Tilburg University, Center for Economic Research.
    6. 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.
    7. 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).
    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. 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).
    13. 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.
    14. Reyer Gerlagh & Veronica Lupi & Marzio Galeotti, 2023. "Fertility and climate change," Scandinavian Journal of Economics, Wiley Blackwell, vol. 125(1), pages 208-252, January.
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    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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