Population Growth and Climate Change: A Dynamic Integrated Climate-Economy-Demography Model

We explore the bidirectional relationship between population growth and climate change: while population determines carbon emissions which drive climate change, climate change impacts the mortality rate and so population growth. Such population-climate feedback effects suggest that demographic policy may represent an alternative to traditional mitigation policies. We explore this possibility by introducing a population policy aiming at imposing a cap on population growth into an extended global integrated assessment model of climate-economy with endogenous fertility choices and temperature-related mortality. We show that the social costs of environmental policies, as reflected by both the social cost of carbon and social welfare, substantially increase by accounting for endogenous population change, but demographic policy allows to significantly reduce such costs. This clearly suggests that population growth does matter and so population policy may represent an effective mitigation tool to complement standard climate policies.