Abstract
Population ageing will accelerate in the coming decades in China. This ageing may have considerable impact on the economy and energy-related emissions, potentially affecting the global economy and global climate. By using a global computable general equilibrium (CGE) model we explore the impact caused by the population ageing through imposing the expected 2050 age structure on the economy and population size of 2011. Results show that gross domestic product (GDP) of China is reduced by nearly 10% as the ageing reduces consumption, labor supply and investments. However, increasing returns to capital abroad adds support to domestic demand. Ageing process in other countries can double ageing impacts on domestic consumption and encourage only a few production sectors in China. Global energy-related emissions is reduced by 700 Mt carbon dioxide (or about 70% of the 2011 emissions in Japan) due to the population ageing in China.
Highlights
To compare deviations of alternative scenarios from BAU, all prices and monetary values are expressed as real prices [30,31] by using the consumer price index (CPI) as a deflator, meaning in each scenario, all prices are adjusted by a CPI index such that one can pay the same price in alternative scenarios as in BAU to buy all the BAU commodities for domestic final consumption
As other countries are less affected by the population ageing, capital assets abroad owned by China receives relatively higher returns, which serves as an additional source of income to support domestic consumption and investments
Domestic consumption and investments are reduced less than 2% gross domestic product (GDP) declines by 9% compared to BAU in Scenarios SN2 and SN3 (Table 4)
Summary
In 2050, the share of the elderly is expected to reach 27.6%, or three times the share in 2010 [2] This rapid ageing has caused considerable concerns about its impact on the economy, environment and society. Previous studies have argued that population ageing can affect an economy both positively and negatively. According to a review by Sukpaiboonwat et al [4], population ageing can enhance human capital accumulation and promote economic growth. Population ageing can weaken economic growth through several channels such as high public spending on healthcare and reduction in labor supply, consumption, and investments. While acknowledging human capital accumulation possibly will accompany the ageing process, we explore how a relative increase of the elderly in a population affects economic growth, consumption and energy-related emissions in the case of China
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