The faster the population grows, the higher the carbon tax needed to offset climate change – LSE

It may be necessary to reduce the population growth rate to secure a politically acceptable carbon price, writes Peter K. Kruse-Andersen

Essentially, all environmental problems are scale problems. It is difficult to imagine that the human impact on the global climate system would be a top priority in a world with a global population of 8 million. Even with substantially higher fossil fuel consumption per capita, this hypothetical economy would emit only a small fraction of current carbon emissions. However, the reality is that we are nearly 8 billion people on this planet, and it seems like climate change is one of the main global issues of the 21st century.

On the other hand, it is difficult to imagine that our technological achievements could have been realised in this hypothetical world of 8 million people. This is not only because true geniuses are few and far between. But also because a larger economy allows more people to be allocated to research, resulting in more ideas, technologies, and scientific discoveries.

When it comes to climate change, a key question is which of these (potentially) offsetting scale effects is likely to dominate. The global population is expected to increase by around 40 percent over the remaining part of this century. These more than 3 billion additional people will put severe pressure on the climate, given current production technologies and lifestyle choices. But this population growth also increases the research capacity of the global economy. If this research capacity is directed toward environmentally friendly technologies, population growth could be part of the solution rather than the root of the problem.

Continue reading the article on the LSE Website.

Peter K. Kruse-Andersen is an assistant professor in the department of economics at the University of Copenhagen.