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Global Warming and Demographic Aging: its Effects on Global Prosperity

Dr. Maria Sophia Aguirre Department of Business and Economics

The Catholic University of America

IV Congreso Internacional de la Familia Universidad de la Sabana

Bogotá, Colombia April 25-26, 2008

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Global Warming

A Study of Air and Water Pollution •  Neo-Malthusian theory:

•  population growth destroys the environment. •  people threaten the balance of biodiversity and ecology

of the earth’s resources.

•  One way is through the pollution of air and water. •  Free-market proponents argue that a market-based

approach will encourage the market to help the environment through technological innovation.

•  ‘People as Problem Solvers’ argue that current problems are the result

of poor management from government, believe in win-win free market response.

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Country Total Emissions Annual Change

(%)

Emissions share of world total (%)

Population share

Carbon Emissions per

capita

1990 2004 1990-2004

1990 2004 2004 1990 2004

USA, 4,818 6,045.8 1.8 21.1 20.9 4.6 19.3 20.6

China 2,399 5,007.1 7.8 10.6 17.3 20.2 2.1 3.8

Russia 1,984 1,524.1 -1.9 8.8 5.3 2.2 13.4 10.6

Global Aggregates (development and region level)

High-income OECD

10,055.4 12,137.5 1.5 44.3 41.9 14.3 12.0 13.2

Least 74.1 146.3 7.0 0.3 0.5 11.8 0.2 0.2

Sub-Saharan

454.8 663.1 3.3 2.0 2.3 11.1 1.0 1.0

Medium 5,944.4 10,215.2 5.1 26.2 35.2 65.1 1.8 2.5

World 22,702 28,983 2.0 100 100 100 4.3 4.5

Human development Index, 2008

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Cumulative Emissions

[1751-2004]

Flux in 2004

Flux Growth in 2004

Population in 2004

0%

20%

40%

60%

80%

100%

India

D2-Developing Countries

China Former Soviet Union

D1-Developed Countries Japan EU

USA

Regional Contributions to Carbon Emissions

“Recent Carbon Trends and the Global Carbon Budget,” Global Carbon Project. Nov. 2007.

D3- Least Developed Countries

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Global Warming and Efficiency

•  Eradicating pollution is not the issue, it is making polluting efficient

•  Advancement in technology through human integrity

and innovation allow for environmental efficiency •  Such development allows for more environmental

protection measures to be created without harming the market

•  Innovation and technological advancements allow for

pollution control, not population control policies under the neo-Malthusian theory

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The Population Problem

•  The world population is increasing at a rapid rate, particularly within developing countries

•  Many policy makers and theorists worry that soon there could be

too many people for the amount of resources available •  Many international organizations and developing countries have

implemented population control policies to try and slow this growth before it puts a “burden” on the world’s natural resources

•  Many of these policies are based upon Neo-Malthusian theory •  Population control policies have jeopardized real long-term

economic growth, placing a heavy burden on the economic welfare of these societies.

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Neo-Malthusian Theory

Two main sub-categories:

•  The Limited Resource Perspective: takes the classic Malthusian argument and applies it to all natural resources

•  The Socio-Biological Perspective: almost acting as a

sub-set of the former, treats the environment as a limited resource and regards people as a threat to the biodiversity and ecological balance of that resource.

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The Population Control Argument

•  First: rapid growth in population means the spread of poverty and aggravates conditions such as as poor health, malnutrition, illiteracy, and unemployment (Bucharest, 1974)

•  Second: population threatens government stability in developing countries, and encourages confrontation between developed and developing countries (Memorandum 200)

•  Third: it pushes future generations to scarcity, and an unsustainable environment carrying capacity (Rio, 1992)

•  Fourth: it sees population growth to be symptomatic of the larger problem of women's oppression—the more children a woman has, the less opportunity she has for her own self-actualization and development (Cairo, 1994 and Beijing, 1995)

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Expenditure on Grant-Financed Development Activities of the United Nations System by Sector

(Percentage of Total)

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Aging Population: The Case of China

•  No debate over if or when an aging population will manifest itself: by 2015 the labor supply will begin to shrink and by 2035 China will have a reversed age pyramid.

•  From 2000 to 2025, people above 65 will triple while youngsters under 15 will increase by only 6%.

•  The dependency ratio (defined as the percentage of the population aged 65+ over the percentage of the population aged 15-64) will increase from an average of 50% in 1995, to an average of 85%-90% by the year 2050.

•  Today in China only 44.9 % of the urban employees and 85.4 % of the retirees covered.

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China’s Population Distribution, 2007

20.4%

71.7%

7.9%

0% 20% 40% 60% 80%

0-14

15-64

over 65

Age

Dis

trib

utio

n

Source: World Factbook, 2008

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China’s Population Distribution (year 2050)

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Colombia’s Population Distribution, 2007

29.80%

64.80%

5.40%

0% 10% 20% 30% 40% 50% 60% 70%

0-14

15-64

65+

Age

Percent

Popluation PercentageColombia. CIA World Factbook, 2008

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115

85

73

69

65

53

47

45

45

41

26

27

27

25

24

23

23

22

21

20

France

Sweden

Australia

United States

Canada

Hungary

Poland

United Kingdom

Spain

Azerbaijan

Japan

China

Singapore

Chile

Jamaica

Sri Lanka

Tunisia

Thailand

Brazil

Colombia

Speed of Population Aging

Number of years for % of population aged 65 and over to rise from 7% to 14%

Source: US Census Bureau, 2000

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•  Social security system funding: the family cannot support the elderly

•  Competition between the younger and older people •  Early retirement •  To provide for the economic needs of the elderly, there is a

reduction of funding allocated to training new generations •  The transmission of cultural, scientific, technical, artistic,

moral, and religious goods is endangered: "moroseness” results. Add to this immigration.

•  Saving rates are affected by a society's age structure, mirroring the change in an individual's saving rate over the life cycle.

Aging Trap

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Conclusion

•  Neo-Malthusian application to global warming is seriously flawed according to data on emissions and pollution rates.

•  Policy reactions based in neo-Malthusian theory will be equally

compromising and possibly damaging. •  Pollution is not a matter of preventing but regulating efficiently through

the free-market. •  On Population, the Neo-Malthusian approach is also seriously flawed on

many levels and policy actions based on such assumptions are inefficient and damage real sustainable development. They lead to the again population trap of a one child policy.

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Conclusion

•  The misplaced focus on population size instead of real economic needs of the population have come at the sacrifice of human capital, particularly in developing nations.

Ø Millions of people lack access to safe water, sanitation,

education, medical care and infrastructure to meet needs.

Ø Results in an inefficient use of resources.

•  This is both inefficient and damaging to real long-term economic growth – thus rendering this process fruitless.