Population Under a Cap on Greenhouse Gas Emissions
37 Pages Posted: 14 May 2010
Date Written: May 1, 2010
Abstract
A cap on greenhouse gas emissions makes total emissions a fixed common-property resource. Population increases under a cap are therefore self-limiting: a population increase raises labor and reduces emissions per unit of labor, which lowers incomes and fertility. Because a marginal birth under a cap lowers all incomes, a cap induces a negative population externality. The externality is substantial in calibrations, about 20 percent of income in steady state and 5 percent of income immediately after imposition, or more, per child. Similarly, the optimal population may be one-quarter of the natural population in steady state.
Keywords: Population Externality, Pigovian Tax, Emissions Cap, Endogenous Fertility, Economic Growth, Optimal Population, Calibrated Optimal Child Tax
JEL Classification: H21, H23, O40, Q56
Suggested Citation: Suggested Citation
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