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Title:Population under a cap on Greenhouse Gas Emissions PDF Logo
Authors:Bohn, Henning
Stuart, Charles
Issue Date:2010
Series/Report no.:CESifo working paper Public Finance 3046
Abstract:A cap on greenhouse gas emissions makes total emissions a fixed common-property resource. Population increases under a cap are therefore self-limiting: a population increase raises labor and reduces emissions per unit of labor, which lowers incomes and fertility. Because a marginal birth under a cap lowers all incomes, a cap induces a negative population externality. The externality is substantial in calibrations, about 20 percent of income in steady state and 5 percent of income immediately after imposition, or more, per child. Similarly, the optimal population may be one-quarter of the natural population in steady state.
Subjects:population externality
Pigovian tax
emissions cap
endogenous fertility
economic growth
optimal population
calibrated optimal child tax
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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