Global Warming and the Population Externality

Charles Stuart and Henning Bohn

University of California at Santa Barbara, Economics Working Paper Series from Department of Economics, UC Santa Barbara

Abstract: We calculate the harm a birth imposes on others when greenhouse gas emissions are a problem and a cap limits emissions damage. This negative population externality, which equals the corrective Pigovian tax on having a child, is substantial in calibrations. In our base case, the Pigovian tax is 21 percent of a parent's lifetime income in steady state and 5 percent of lifetime income immediately after imposition of a cap, per child. The optimal population in steady state, which maximizes utility taking account of the externality, is about one quarter of the population households would choose voluntarily

Keywords: population externality; Pigovian tax; emissions cap; endogenous fertility; population growth; economic growth; optimal population; calibrated optimal child tax; greenhouse gas emissions; global warming; Social and Behavioral Sciences (search for similar items in EconPapers)
Date: 2011-04-22
New Economics Papers: this item is included in nep-dem, nep-dge, nep-ene and nep-env
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