COVID-19

Macroeconomic and environmental implications of a demographic transition in a life-cycle model

Crawford School of Public Policy | Centre for Applied Macroeconomic Analysis

Event details

Seminar

Date & time

Thursday 07 May 2020
4.00pm–5.00pm

Venue

Online seminar (Please email the event organiser if you would like to join).

Speaker

Tsendsuren Batsuuri, CAMA PhD Student

Contacts

Rossana Bastos Pinto

Online seminar (Please email the event organiser if you would like to join).

This seminar investigates the macroeconomic and environmental implications of a demographic transition combining a tractable life-cycle model with an energy-dependent production function widely used for climate policy. Simulations show that demographic transitions can have a significant impact on a country’s economic growth and CO2 emissions both in the short and the long run, even in a gradual and slow transition scenario. Specifically, during the transition, a demographic transition can increase CO2 emissions by increasing capital accumulation, energy intensity of the economy, labour force participation, and by increasing prime-age workers in the workforce. Furthermore, the effect of the demographic transition is non-linear, and it will eventually disappear as both fertility and mortality patterns converge to low levels. These findings have several policy implications. First, it implies that when the countries are at different stages of their demographic transition, comparing countries’ efforts to reduce their carbon emissions under the Paris Agreement will be complicated. Second, there may be no free lunch in reducing CO2 emissions as the decline in population growth rate, and the population aging may not produce emissions reductions as often told in popular narratives. This study highlights the importance of incorporating demographic considerations into climate-economy models and proposes an appropriate modelling framework.

Tsendsuren Batsuuri is a Ph.D. student affiliated with the Centre for Applied Macroeconomic Analysis at the Crawford School of Public Policy, ANU, and ARC Centre of Excellence in Population Ageing Research. Her primary research interest is long-term economic projections using structural economic models, and her thesis focuses on the economic and environmental implications of asymmetric global demographic transition. Before her Ph.D. studies, Tsendsuren worked for the Mongolian Ministry of Environment and Green Development, evaluating national GHG emissions projections and mitigation potential. She also contributed to the development of government policy on climate change mitigation and the work of the Economic Research Institute of Mongolia, researching changes in the size and characteristics of its middle class. While working for the Ministry, she spent four months at the UNFCCC’s Climate Technology Centre and Network, aiding in the review of and response to technical assistance requests from developing countries. She also served as an expert reviewer of the 5th National Communication of Turkey on behalf of the UNFCCC on chapters addressing GHG emissions and projections.

The CAMA Macroeconomics Brown Bag Seminars offer CAMA speakers, in particular PhD students, an opportunity to present their work in progress in front of their peers, and reputable visitors to showcase their work.

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