We have never been more people on the planet than we are today. During the last century we have seen an explosive growth in population. At the same time, there’s been an enormous economic growth in the western world. Now it looks like the population growth is stagnating, and many believe that we will reach a peak around 2050. This is good news for the environment, which cannot handle more people. But will the economic growth also drop off as the population growth stagnates?
Unhelpful demographics
It is a question of demography. A young populace can create economic growth. An old populace works less, and demands more money in pensions. Take Japan as an example. During large parts of the twentieth century, Japan experienced great economic growth due to a large number of young people hungry for work. This created enormous values, and Japan turned into one of the wealthiest countries in the world. In the 1990s, the situation took a turn. The wave of workers grew old, and demanded their well-earned pensions. The economy stagnated, and has never managed to get back on its feet. Japan quite simply doesn’t have enough young people. On average, each woman gives birth to 1,2 children, and the average age is over 40.
The same thing seems to be happening in Norway and in the rest of the western world. The Norwegian Finance Minister recently told the newspaper E24.no that due to an aging population we either have to cut in welfare or increase taxes between now and 2060. Luckily for the Norwegians, pension reforms, and an enormous oil fund ensures a better future than for many other countries.
An aging and stagnating population appears to be a big problem for the world economy. Less people working and more retired people ensure that a larger part of the national budgets will go to pensions. For the environment, however, the stagnating growth in population looks to be very positive. The world cannot handle more people than it does today. Economic growth as a consequence of a population boom seems to have been a one-time-only kind of deal, which we neither could nor should try to repeat.
A good investment
It looks like the population growth might stagnate by itself, but it still might be smart to help it on its way. Investments in family planning have turned out to be significantly cost effective in an environmental perspective. Stopping emissions by family planning costs about 4,5 dollars per ton of carbon dioxide. Stopping emissions by investing in solar panels, costs over six times as much, 30 dollars per ton.
The hard decision
What do we value the most, the environment or the economy? If we choose the economy, we need more young people, and more babies. If we choose the environment, we need less people. But this will hurt the economy, since the population will be aging. We can’t have the cake, and eat it too. We just have to hope that tomorrow’s politicians realize that even if a stagnating population growth gives economic troubles, it is nothing compared to the troubles resulting from ignoring the environment.
Population growth has turned out to be a boon to the economy, but it is a big problem for the enviroment. CMSeter / http://www.sxc.hu/profile/CMSeter
12 February 2013
