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

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.

Global Demographic Change and Climate Policies

“…De la Croix and Gosseries (2012) study the effect of climate policies on fertility and human capital. In a similar vein, with respect to the relationship between carbon emissions and population, Casey and Galor (2017) provide empirical evidence that a reduction in fertility rates, while increases income per capita, diminishes carbon emissions. Likewise, Dalton et al (2008) provides an analysis of the effect of population aging on U.S energy use and carbon emissions.…”

The Effects of a Revenue-Neutral Child Subsidy Tax Mechanism on Growth and GHG Emissions

“…Particularly, the model can be extended to address the possibility of increasing per capita incomes that can lead to an overproportional increase in consumption and/or production patterns which could be potentially harmful for the environment. Although, the case study of Casey and Galor [114] indicates that such behavioral changes are not expected, but we cannot exclude this.…”

“…The advantage of our proposal is that it is costless. Casey and Galor [114] consider Nigeria as a case and compare different population development scenarios of the United Nations. They note that a 1% slower population growth could be accompanied by an increase in income per capita of nearly 7% while still lowering carbon emissions.…”

“…All studies agree that population growth has the strongest effect on CO 2 emissions. Casey and Galor [114] recently derived that a move from the medium to the low variant of UN fertility projections will be associated with a 35% decline in the yearly GHG emissions and 15% higher income per capita. Therefore, we assume conservatively that η ≤ 1 and δ = 1.…”

Impact of Economic Growth, Energy Use and Population Growth on Carbon Emissions in Sub-Sahara Africa

“…An increase in energy use and population growth by 1% would cause an increase in CO 2 concentration by 0.8% and 0.22% as confirmed by Refs. [65,66]. But on the other hand, economic output will be insignificant in contribution to environmental pollution.…”