Global Warming and Demographic Aging: its Effects on Global Prosperity Dr. Maria Sophia Aguirre Department of Business and Economics The Catholic University.

Global Warming and Global Warming and Demographic Aging: its Demographic Aging: its

Effects on Global Effects on Global ProsperityProsperity

Dr. Maria Sophia AguirreDr. Maria Sophia AguirreDepartment of Business and EconomicsDepartment of Business and Economics

The Catholic University of AmericaThe Catholic University of America

IV Congreso Internacional de la FamiliaUniversidad de la Sabana

Bogotá, ColombiaApril 25-26, 2008

Global WarmingGlobal Warming

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

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

ecology of the earth’s resources.ecology of the earth’s resources.

• One way is through the pollution of air and water.One way is through the pollution of air and water.

• Free-market proponents argue that a market-based Free-market proponents argue that a market-based approach will encourage the market to help the approach will encourage the market to help the environment through technological innovation. environment through technological innovation.

• ‘‘People as Problem Solvers’ argue that current problems are People as Problem Solvers’ argue that current problems are the result of poor management from government, believe in the result of poor management from government, believe in win-win free market response.win-win free market response.

CountryCountry Total Total EmissionsEmissions

Annual Annual ChangChange (%)e (%)

Emissions Emissions share of world share of world

total (%)total (%)

PopuPopulatiolation sharen share

Carbon Carbon Emissions Emissions per capitaper capita

19901990 20042004 1990-1990-20042004

19901990 20042004 20042004 19901990 20042004

USA,USA, 4,814,8188

6,045.6,045.88

1.81.8 21.121.1 20.920.9 4.64.6 19.319.3 20.620.6

ChinaChina 2,392,3999

5,007.5,007.11

7.87.8 10.610.6 17.317.3 20.220.2 2.12.1 3.83.8

RussiaRussia 1,981,9844

1,524.1,524.11

-1.9-1.9 8.88.8 5.35.3 2.22.2 13.413.4 10.610.6

Global Aggregates (development and region level)Global Aggregates (development and region level)

High-High-incomincom

e e OECDOECD

10,055.10,055.44

12,137.12,137.55

1.51.5 44.344.3 41.941.9 14.314.3 12.012.0 13.213.2

LeastLeast 74.174.1 146.3146.3 7.07.0 0.30.3 0.50.5 11.811.8 0.20.2 0.20.2

Sub-Sub-SaharaSahara

nn

454.8454.8 663.1663.1 3.33.3 2.02.0 2.32.3 11.111.1 1.01.0 1.01.0

MediumMedium 5,944.5,944.44

10,215.10,215.22

5.15.1 26.226.2 35.235.2 65.165.1 1.81.8 2.52.5

WorldWorld 22,70222,702 28,98328,983 2.02.0 100100 100100 100100 4.34.3 4.54.5Human development Index, 2008

CumulativeEmissions

[1751-2004]

Fluxin 2004

FluxGrowthin 2004

Populationin 2004

0%

20%

40%

60%

80%

100%

India

D2-Developing Countries

ChinaFormer Soviet Union

D1-Developed CountriesJapanEU

USA

Regional Contributions to Carbon Regional Contributions to Carbon

EmissionsEmissions

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

D3- Least Developed Countries

Global Warming and Global Warming and EfficiencyEfficiency

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

• Advancement in technology through human integrity and Advancement in technology through human integrity and innovation allow for environmental efficiencyinnovation allow for environmental efficiency

• Such development allows for more environmental Such development allows for more environmental protection measures to be created without harming the protection measures to be created without harming the marketmarket

• Innovation and technological advancements allow for Innovation and technological advancements allow for pollution control, not population control policies under the pollution control, not population control policies under the neo-Malthusian theoryneo-Malthusian theory

The Population ProblemThe Population Problem

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

• Many policy makers and theorists worry that soon there could be too Many policy makers and theorists worry that soon there could be too many people for the amount of resources availablemany people for the amount of resources available

• Many international organizations and developing countries have Many international organizations and developing countries have implemented population control policies to try and slow this growth implemented population control policies to try and slow this growth before it puts a “burden” on the world’s natural resourcesbefore it puts a “burden” on the world’s natural resources

• Many of these policies are based upon Neo-Malthusian theoryMany of these policies are based upon Neo-Malthusian theory

• Population control policies have jeopardized real long-term economic Population control policies have jeopardized real long-term economic growth, placing a heavy burden on the economic welfare of these growth, placing a heavy burden on the economic welfare of these societies.societies.

Neo-Malthusian TheoryNeo-Malthusian Theory

Two main sub-categories:Two main sub-categories:

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

• The Socio-Biological Perspective: almost acting as The Socio-Biological Perspective: almost acting as a sub-set of the former, treats the environment as a sub-set of the former, treats the environment as a limited resource and regards people as a threat a limited resource and regards people as a threat to the biodiversity and ecological balance of that to the biodiversity and ecological balance of that resource. resource.

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)

0

5

10

15

20

25

Year

Per

cent

age

of T

otal

Population Energy IndustryTransport Communications Trade and DevelopmentScience and Technology Employment

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

(Percentage of Total)

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.

China’s Population Distribution, China’s Population Distribution, 20072007

20.4%

71.7%

7.9%

0% 20% 40% 60% 80%

0-14

15-64

over 65

Age

Dist

ribu

tion

Source: World Factbook, 2008

China’s Population China’s Population DistributionDistribution(year 2050)(year 2050)

Colombia’s Population Distribution, Colombia’s Population Distribution, 20072007

29.80%

64.80%

5.40%

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

0-14

15-64

65+

Age

Percent

Popluation Percentage

Colombia. CIA World Factbook, 2008

11585

7369

6553

474545

41262727

25242323222120

FranceSweden

AustraliaUnited States

CanadaHungary

PolandUnited Kingdom

SpainAzerbaijan

JapanChina

SingaporeChile

JamaicaSri Lanka

TunisiaThailand

BrazilColombia

Speed of Population AgingNumber of years for % of population aged 65 and over to rise from 7% to 14%

Source: US Census Bureau, 2000

• 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 TrapAging Trap

ConclusionConclusion

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

• Policy reactions based in neo-Malthusian theory will be Policy reactions based in neo-Malthusian theory will be equally compromising and possibly damaging.equally compromising and possibly damaging.

• Pollution is not a matter of preventing but regulating Pollution is not a matter of preventing but regulating

efficiently through the free-market.efficiently through the free-market.

• On Population, the Neo-Malthusian approach is also seriously On Population, the Neo-Malthusian approach is also seriously flawed on many levels and policy actions based on such flawed on many levels and policy actions based on such assumptions are inefficient and damage real sustainable assumptions are inefficient and damage real sustainable development. They lead to the again population trap of a one development. They lead to the again population trap of a one child policy.child policy.

ConclusionConclusion

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

Millions of people lack access to safe water, Millions of people lack access to safe water, sanitation, education, medical care and sanitation, education, medical care and infrastructure to meet needs. infrastructure to meet needs.

Results in an inefficient use of resources.Results in an inefficient use of resources.

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