A dynamic analysis of human welfare in a warming planet

Humberto Llavador, John Roemer and Joaquim Silvestre

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: Climate science indicates that climate stabilization requires low GHG emissions. Is this consistent with nondecreasing human welfare? Our welfare or utility index emphasizes education, knowledge, and the environment. We construct and calibrate a multigenerational model with intertemporal links provided by education, physical capital, knowledge and the environment. We reject discounted utilitarianism and adopt, first, the Pure Sustainability Optimization (or Intergenerational Maximin) criterion, and, second, the Sustainable Growth Optimization criterion, that maximizes the utility of the first generation subject to a given future rate of growth. We apply these criteria to our calibrated model via a novel algorithm inspired by the turnpike property. The computed paths yield levels of utility higher than the level at reference year 2000 for all generations. They require the doubling of the fraction of labor resources devoted to the creation of knowledge relative to the reference level, whereas the fractions of labor allocated to consumption and leisure are similar to the reference ones. On the other hand, higher growth rates require substantial increases in the fraction of labor devoted to education, together with moderate increases in the fractions of labor devoted to knowledge and the investment in physical capital.

Keywords: Climate change; education; Maximin; growth. (search for similar items in EconPapers)
JEL-codes: D63 O40 O41 Q50 Q54 Q56 (search for similar items in EconPapers)
Date: 2008-09, Revised 2010-02
New Economics Papers: this item is included in nep-ene, nep-env and nep-hap
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: A Dynamic Analysis of Human Welfare in a Warming Planet (2015)
Journal Article: A dynamic analysis of human welfare in a warming planet (2011)
Working Paper: A DYNAMIC ANALYSIS OF HUMAN WELFARE IN A WARMING PLANET? (2009)
Working Paper: A Dynamic Analysis of Human Welfare in a Warming Planet (2009)
Working Paper: A Dynamic Analysis of Human Welfare in a Warming Planet (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:1110

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