Population aging and future carbon emissions in the United States

Changes in the age composition of U.S. households over the next several decades could affect energy use and carbon dioxide (CO2) emissions, the most important greenhouse gas. This article incorporates population age structure into an energy-economic growth model with multiple dynasties of heterogeneous households. The model is used to estimate and compare effects of population aging and technical change on baseline paths of U.S. energy use, and CO2 emissions. Results show that population aging reduces long-term emissions, by almost 40% in a low population scenario, and effects of aging on emissions can be as large, or larger than, effects of technical change in some cases. These results are derived under standard assumptions and functional forms that are used in economic growth models. The model also assumes a closed economy, substitution elasticities that are fixed, and identical across age groups, and patterns of labor supply that vary by age group, but are fixed over time.