Journal of Population Economics

, Volume 31, Issue 1, pp 295–335 | Cite as

Optimal population and exhaustible resource constraints

Original Paper
  • 200 Downloads

Abstract

A large literature considers the optimal size and growth rate of the human population, trading off the utility value of additional people with the costs of a larger population. In this literature, an important parameter is the social weight placed on population size; a standard result is that a planner with a larger weight on population chooses larger population levels and growth rates. We demonstrate that this result is conditionally overturned when an exhaustible resource constraint is introduced: if the discount rate is small enough, the optimal population today decreases with the welfare weight on population size. That is, a more total-utilitarian social planner could prefer a smaller population today than a more average-utilitarian social planner. We also present a numerical illustration applied to the case of climate change, where we show that under plausible real-world parameter values, our result matters for the direction and magnitude of optimal population policy.

Keywords

Optimal population Climate change Social choice and welfare Exhaustible resources Population ethics and policy Utilitarianism 

JEL Classification

J10 J19 I31 

Notes

Acknowledgments

We would like to thank Raouf Boucekkine, David de la Croix, Giorgio Fabbri, Marc Fleurbaey, and seminar participants at the University of Copenhagen and the Indian Statistical Institute—Delhi for their comments. We are especially grateful for the help and guidance provided by two anonymous referees of this journal and by the editor. Any errors or omissions are the responsibility of the authors.

Compliance with ethical standards

This project received no funding. The authors declare that they have no conflict of interest. Although unrelated to this project, Dean Spears, in his capacity of Executive Director of r.i.c.e. (a 501(c)3 public charity), has received grants from the Bill and Melinda Gates Foundation, the NIH, USAID, and the IGC, and has been a paid consultant for the World Bank.

References

  1. Abel G J, Barakat B, Samir K, Lutz W (2016) Meeting the sustainable development goals leads to lower world population growth. PNAS 113(50):14294–14299CrossRefGoogle Scholar
  2. Asheim G B, Buchholz W, Hartwick J M, Mitra T, Withagen C (2007) Constant savings rates and quasi-arithmetic population growth under exhaustible resource constraints. J Environ Econ Manag 53(2):213–229CrossRefGoogle Scholar
  3. Barro R J, Becker G S (1989) Fertility choice in a model of economic growth. Econometrica 57(2):481–501CrossRefGoogle Scholar
  4. Baudin T (2011) Family policies: what does the standard endogenous fertility model tell us? J Public Econ Theory 13(4):555–593CrossRefGoogle Scholar
  5. Becker G S, Barro R J (1988) A reformulation of the economic theory of fertility. Q J Econ 103(1):1–25CrossRefGoogle Scholar
  6. Blackorby C, Bossert W, Donaldson D (1995) Intertemporal population ethics: critical-level utilitarian principles. Econometrica 63(6):1303–1320CrossRefGoogle Scholar
  7. Bohn H, Stuart C (2015) Calculation of a population externality. Amer Econ J Econ Polic 7(2):61–87CrossRefGoogle Scholar
  8. Boucekkine R, Fabbri G (2013) Assessing Parfit’s repugnant conclusion within a canonical endogenous growth set-up. J Popul Econ 26(2):751–767CrossRefGoogle Scholar
  9. Boucekkine R, Fabbri G, Gozzi F (2014) Egalitarianism under population change: age structure does matter. J Math Econ 55:86–100CrossRefGoogle Scholar
  10. Bradshaw C J, Brook B W (2014) Human population reduction is not a quick fix for environmental problems. PNAS 111(46):16610–16615CrossRefGoogle Scholar
  11. Budolfson M, Dennig F, Fleurbaey M, Scovronick N, Siebert A, Spears D, Wagner F (2017) Optimal climate policy and the future of world economic development. World Bank Econ Rev, forthcomingGoogle Scholar
  12. Cigno A (1981) Growth with exhaustible resources and endogenous population. Rev Econ Stud 48(2):281–287CrossRefGoogle Scholar
  13. Cole M A, Neumayer E (2004) Examining the impact of demographic factors on air pollution. Popul Environ 26(1):5–21CrossRefGoogle Scholar
  14. Conde-Ruiz J I, Giménez E L, Pérez-Nievas M (2010) Millian efficiency with endogenous fertility. Rev Econ Stud 77(1):154–187CrossRefGoogle Scholar
  15. Conly S (2015) One child. Do we have a right to more? Oxford University Press, New YorkGoogle Scholar
  16. Connelly M (2008) Fatal misconception: the struggle to control world population. Harvard University Press, CambridgeGoogle Scholar
  17. Dasgupta P (1969) On the concept of optimum population. Rev Econ Stud 36 (3):295–318CrossRefGoogle Scholar
  18. Dasgupta P (1995) The population problem: theory and evidence. J Econ Lit 33(4):1879–1902Google Scholar
  19. Dasgupta P (1998) Population, Consumption and Resources: Ethical Issues. Ecol Econ 24(2–3):139–152CrossRefGoogle Scholar
  20. Dasgupta S, Mitra T (1982) On some problems in the formulation of optimal population policies when resources are depletable. In: Eichhorn W, Henn R, Neumann K, Shephard R (eds) Economic theory of natural resources. Springer, pp 409–429Google Scholar
  21. de la Croix D, Gosseries A (2009) Population policy through tradable procreation entitlements. Int Econ Rev 50(2):507–542CrossRefGoogle Scholar
  22. Dietz T, Rosa E A (1997) Effects of population and affluence on C O 2 emissions. PNAS 94(1):175–179CrossRefGoogle Scholar
  23. Gaffin S R, O’Neill B C (1997) Population and global warming with and without CO 2 Targets. Popul Environ 18(4):389–413CrossRefGoogle Scholar
  24. Golosov M, Jones L E, Tertilt M (2007) Efficiency with endogenous population growth. Econometrica 75(4):1039–1071CrossRefGoogle Scholar
  25. Harford J D (1997) Stock pollution, child-bearing externalities, and the social discount rate. J Environ Econ Manag 33(1):94–105CrossRefGoogle Scholar
  26. Harford J D (1998) The ultimate externality. Amer Econ Rev 88(1):260–265Google Scholar
  27. Jones L E, Schoonbroodt A (2010) Complements versus substitutes and trends in fertility choice in dynastic models. Int Econ Rev 51(3):671–699CrossRefGoogle Scholar
  28. Kelly D L, Kolstad C D (2001) Malthus and climate change: betting on a stable population. J Environ Econ Manag 41(2):135–161CrossRefGoogle Scholar
  29. Lam D (2011) How the world survived the population bomb: lessons from 50 years of extraordinary demographic history. Demography 48(4):1231–1262CrossRefGoogle Scholar
  30. Liddle B (2011) Consumption-driven environmental impact and age structure change in OECD countries: a cointegration-STIRPAT analysis. Demogr Res 24:749–770CrossRefGoogle Scholar
  31. Mitra T (1983) Limits on population growth under exhaustible resource constraints. Int Econ Rev 24(1):155–168CrossRefGoogle Scholar
  32. Nerlove M, Razin A, Sadka E (1982) Population size and the social welfare functions of Bentham and Mill. Econ Lett 10(1–2):61–64CrossRefGoogle Scholar
  33. Nerlove M, Razin A, Sadka E (1985) Population size: individual choice and social optima. Q J Econ 100(2):321–334CrossRefGoogle Scholar
  34. Nerlove M, Razin A, Sadka E (1986a) Endogenous population with public goods and malthusian fixed resources: efficiency or market failure. Int Econ Rev 27 (3):601–609Google Scholar
  35. Nerlove M, Razin A, Sadka E (1986b) Some welfare theoretic implications of endogenous fertility. Int Econ Rev 27(1):3–31Google Scholar
  36. Nordhaus W D (2008) A question of balance: weighing the options on global warming policies. Yale University Press, New Haven and LondonGoogle Scholar
  37. O’Neill B C, MacKellar F L, Lutz W (2005) Population and climate change. Cambridge University Press, New YorkGoogle Scholar
  38. O’Neill B C, Dalton M, Fuchs R, Jiang L, Pachauri S, Zigova K (2010) Global demographic trends and future carbon emissions. PNAS 107(41):17521–17526CrossRefGoogle Scholar
  39. O’Neill B C, Liddle B, Jiang L, Smith K R, Pachauri S, Dalton M, Fuchs R (2012) Demographic change and carbon dioxide emissions. Lancet 380 (9837):157–164CrossRefGoogle Scholar
  40. Palivos T, Yip C K (1993) Optimal population size and endogenous growth. Econ Lett 41(1):107–110CrossRefGoogle Scholar
  41. Parfit D (1984) Reasons and persons. Oxford University Press, OxfordGoogle Scholar
  42. Pindyck R S (2013) Climate change policy: what do the models tell us? J Econ Lit 51(3):860–872CrossRefGoogle Scholar
  43. Razin A, Ben-Zion U (1975) An intergenerational model of population growth. Amer Econ Rev 65(5):923–933Google Scholar
  44. Razin A, Yuen C -W (1995) Utilitarian tradeoff between population growth and income growth. J Popul Econ 8(1):81–87CrossRefGoogle Scholar
  45. Renström T I, Spataro L (2011) The optimum growth rate for population under critical-level utilitarianism. J Popul Econ 24(3):1181–1201CrossRefGoogle Scholar
  46. Robinson J A, Srinivasan T (1997) Long-term consequences of population growth: technological change, natural resources, and the environment. In: Rosenzweig M, Stark O (eds) Handbook of population and family economics, vol 1b. Elsevier, pp 1175–1298Google Scholar
  47. Spears D (2015) Smaller human population in 2100 could importantly reduce the risk of climate catastrophe. PNAS 112(18):E2270CrossRefGoogle Scholar
  48. Spears D (2017) Making people happy or making happy people? Questionnaire-experimental studies of population ethics and policy. Soc Choice Welf 49(1):145–169CrossRefGoogle Scholar
  49. Stern N (2007) The economics of climate change: the Stern Review. Cambridge University Press, Cambridge and New YorkCrossRefGoogle Scholar
  50. Stern N (2013) The structure of economic modeling of the potential impacts of climate change: grafting gross underestimation of risk onto already narrow science models. J Econ Lit 51(3):838–859CrossRefGoogle Scholar
  51. Stiglitz J E (1974) Growth with exhaustible natural resources: the competitive economy. Rev Econ Stud 41 (Symposium on the Economics of Exhaustible Resources):139–152CrossRefGoogle Scholar
  52. Weitzman M L (2009) On modeling and interpreting the economics of catastrophic climate change. Rev Econ Stat 91(1):1–19CrossRefGoogle Scholar
  53. Wheeler D, Hammer D (2010) The economics of population policy for carbon emissions reduction in developing countries, working paper 229. Center for Global DevelopmentGoogle Scholar

Copyright information

© Springer-Verlag GmbH Germany 2017

Authors and Affiliations

  1. 1.Département des sciences économiquesUniversité du Québec à MontréalMontréalCanada
  2. 2.Department of EconomicsUniversity of Texas at AustinAustinUSA
  3. 3.Indian Statistical Institute - Delhi CentreNew DelhiIndia

Personalised recommendations