Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171081
Authors: 
Gerlagh, Reyer
Jaimes, Richard
Motavasseli, Ali
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper 6617
Abstract: 
Between 1950 and 2017, world average life expectancy increased from below-50 to above-70, while the fertility rate dropped from 5 to about 2.5. We develop and calibrate an analytic climate-economy model with overlapping generations to study the effect of such demographic change on capital markets and optimal climate policies. Our model replicates findings from the OLG-demography literature, such as a rise in households’ savings, and a declining rate of return to capital. We also find that demographic change raises the social cost of carbon, at 2020, from 28 euro/tCO2 in a model that abstracts from demography, to 94 euro/tCO2 in our calibrated model.
Subjects: 
climate change
social cost of carbon
environmental policy
demographic trends
JEL: 
H23
J11
Q54
Q58
Document Type: 
Working Paper
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