Global Warming and Demographic Aging: its Effects on Global Prosperity

1. Global Warming and Demographic Aging: its Effects on Global Prosperity Dr. Maria Sophia Aguirre Department of Business and Economics The Catholic University of America IV Congreso Internacional de la Familia Universidad de la Sabana Bogotá, Colombia April 25-26, 2008

2. Global WarmingA Study of Air and Water Pollution • Neo-Malthusian theory: • population growth destroys the environment. • people threaten the balance of biodiversity and ecology of the earth’s resources. • One way is through the pollution of air and water. • Free-market proponents argue that a market-based approach will encourage the market to help the environment through technological innovation. • ‘People as Problem Solvers’ argue that current problems are the result of poor management from government, believe in win-win free market response.

3. Human development Index, 2008

4. Regional Contributions to Carbon Emissions 100% D3- Least Developed Countries 80% D2-Developing Countries 60% India 40% China FormerSoviet Union 20% D1-DevelopedCountries Japan EU 0% USA Cumulative Emissions [1751-2004] Flux in 2004 Population in 2004 Flux Growth in 2004 “Recent Carbon Trends and the Global Carbon Budget,” Global Carbon Project. Nov. 2007.

5. Global Warming and Efficiency • Eradicating pollution is not the issue, it is making polluting efficient • Advancement in technology through human integrity and innovation allow for environmental efficiency • Such development allows for more environmental protection measures to be created without harming the market • Innovation and technological advancements allow for pollution control, not population control policies under the neo-Malthusian theory

6. The Population Problem • The world population is increasing at a rapid rate, particularly within developing countries • Many policy makers and theorists worry that soon there could be too many people for the amount of resources available • Many international organizations and developing countries have implemented population control policies to try and slow this growth before it puts a “burden” on the world’s natural resources • Many of these policies are based upon Neo-Malthusian theory • Population control policies have jeopardized real long-term economic growth, placing a heavy burden on the economic welfare of these societies.

7. Neo-Malthusian Theory Two main sub-categories: • The Limited Resource Perspective: takes the classic Malthusian argument and applies it to all natural resources • The Socio-Biological Perspective: almost acting as a sub-set of the former, treats the environment as a limited resource and regards people as a threat to the biodiversity and ecological balance of that resource.

8. 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)

9. Expenditure on Grant-Financed Development Activities of the United Nations System by Sector (Percentage of Total)

10. 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.

11. China’s Population Distribution, 2007 Source: World Factbook, 2008

12. China’s Population Distribution(year 2050)

13. Colombia’s Population Distribution, 2007 Colombia. CIA World Factbook, 2008

14. Speed of Population Aging Number of years for % of population aged 65 and over to rise from 7% to 14% Source: US Census Bureau, 2000

15. Aging Trap • 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.

16. Conclusion • Neo-Malthusian application to global warming is seriously flawed according to data on emissions and pollution rates. • Policy reactions based in neo-Malthusian theory will be equally compromising and possibly damaging. • Pollution is not a matter of preventing but regulating efficiently through the free-market. • On Population, the Neo-Malthusian approach is also seriously flawed on many levels and policy actions based on such assumptions are inefficient and damage real sustainable development. They lead to the again population trap of a one child policy.

17. Conclusion • The misplaced focus on population size instead of real economic needs of the population have come at the sacrifice of human capital, particularly in developing nations. • Millions of people lack access to safe water, sanitation, education, medical care and infrastructure to meet needs. • Results in an inefficient use of resources. • This is both inefficient and damaging to real long-term economic growth – thus rendering this process fruitless.