Climate, technology, family size; on the crossroad between two ultimate externalities

Reyer Gerlagh

European Economic Review, 2023, vol. 152, issue C

Abstract: We extend the Brock–Mirman model with endogenous growth through variety expansion, temperature rise affecting both the level and build up of TFP, human capital, and endogenous fertility. We derive closed-form solutions for capital investments, research, and the Social Cost of Carbon. Calibration of the fundamentals show that the social costs of carbon associated with reduced TFP growth are very large (median: 161 €/tCO2) compared to previous SCC estimates based on climate change TFP-level effects. We also compare the contribution of population growth to welfare through its effects on knowledge creation versus its effect on accelerated climate change. We find in most cases a net positive externality of children on average welfare for other dynasties (median: 22 k€/child).

Keywords: Climate change; R&D-based growth; Population level; Social cost of carbon (search for similar items in EconPapers)
JEL-codes: O44 Q54 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:152:y:2023:i:c:s0014292123000053

DOI: 10.1016/j.euroecorev.2023.104376

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