Grantee Research Project Results
2005 Progress Report: Households, Consumption, and Energy Use: The Role of Demographic Change in Future U.S. Greenhouse Gas Emissions
EPA Grant Number: R829801Title: Households, Consumption, and Energy Use: The Role of Demographic Change in Future U.S. Greenhouse Gas Emissions
Investigators: ONeill, Brian , Prskawetz, Alexia , Leiwen, Jiang , Pitkin, John , Dalton, Michael
Current Investigators: ONeill, Brian , Dalton, Michael , Prskawetz, Alexia , Pitkin, John , Leiwen, Jiang
Institution: Brown University
Current Institution: Brown University , California State University - Monterey Bay , Max Planck Institute for Demographic Research
EPA Project Officer: Hahn, Intaek
Project Period: September 1, 2002 through September 30, 2005 (Extended to September 30, 2006)
Project Period Covered by this Report: September 1, 2004 through September 30, 2005
Project Amount: $279,015
RFA: Futures: Research in Socio-Economics (2001) RFA Text
Research Category: Environmental Justice
Objective:
The primary objective of this research project is to determine whether expected changes in the composition of the U.S. population by household type over the next 25-100 years will have a substantial influence on total energy demand and carbon dioxide emissions. The specific objectives of this research project are to: (1) develop a set of long-term household projections that characterize plausible ranges of the future distribution of households by size, age, composition, and other demographic characteristics, including nativity; (2) quantify how consumption patterns vary across households of different types; and (3) introduce disaggregated household types into an existing energy-economic growth model of the United States to test the effect of accounting for demographic heterogeneity in energy and emissions projections, including the potential effects of alternative immigration scenarios.
Progress Summary:
We have built on work in Years 1 and 2 to make further progress toward our specific objectives.
Objective 1: To Develop a Set of Long-Term Household Projections That Characterize Plausible Ranges of the Future Distribution of Households
In Year 3, we used the revised input assumptions that we developed in Year 2 to produce a new set of household projections: (1) a medium projection, (2) a projection with large households and a young age structure, and (3) a projection with small households and an old age structure. Projection results show that the percentage of people living in households headed by the elderly may climb from 11 percent in 2000 to between 20 and 40 percent in 2100 (Figure 1), whereas the average size of households could plausibly be as low as 2.0 or as high as 3.0 by the second half of the century. We produced a draft manuscript intended for submission to Population and Development Review and plan to finalize this paper during Year 4 (during the no-cost extension, see below).
Figure 1. Proportion of Population Living in the Households by Age of the Head
Objective 3: To Introduce Disaggregated Household Types Into an Existing Energy-Economic Growth Model of the United States
At the beginning of Year 3, we modified our approach to incorporating age heterogeneity into the Population-Environment-Technology (PET) model by developing a “multiple dynasty” structure that shares features of Infinitely Lived Agent (ILA) and Overlapping Generations approaches. The original PET model has an ILA structure with perfect foresight. Any disaggregation of the population into separate age groups therefore must account for the fact that households will make savings and consumption decisions based on forward-looking behavior over their life cycle and the life cycle of their children. Thus, we disaggregate the population not by age groups per se, but by dynasties (i.e., groups that contain households of a given age today and that track those households, and the households of their children, as they age over time). We use the results of new household projections for the United States to construct “cohorts” of households, where household age is defined by the age of the household head. Household cohorts from the ProFamy model are grouped into three infinitely lived dynasties in the PET model. Each dynasty contains households separated in age by the average length of a generation, taken to be 30 years. For example, today’s 80-year-old, 50-year-old, and 20-year-old households are grouped in a single dynasty, based on the assumption that the younger households are, on average, descendents of the older households
We use the PET model to estimate effects of population aging by comparing emissions baselines from simulations with age-specific heterogeneity to baselines without aging and a representative household. To isolate demographic effects, the first set of simulations does not include technical change. Our results compare two types of heterogeneous households to a representative household. The first type has heterogeneity only in expenditure shares for different consumer goods that depends on age of the household head. The second type has heterogeneity in expenditure shares and also in sources of household income, including capital and labor.
The first type of heterogeneity affects only the composition of demand, but our results show these effects are negligible. In contrast, age-specific heterogeneity in labor income reduces CO2 emissions by 11 percent, 18 percent, and 37 percent per year by 2100 in the high, medium, and low population scenarios, respectively. In our reference case, a labor scale effect accounts for about 85 percent of these reductions, and the other 15 percent is from capital dynamics and general equilibrium effects. Sensitivity analysis indicates, however, that simply scaling labor supply of a single representative dynasty to account for population aging has ambiguous effects that either underestimate or overestimate emissions reductions from population aging, depending on values of household substitution parameters, about which we are uncertain.
A second set of simulations compares emissions baselines with population aging to a representative household in the presence of technical change. Assumptions about technical change are based on the Intergovernmental Panel on Climate Change Special Report on Emissions Scenarios A1 Scenario for Organisation for Economic and Co-operation and Development countries. For our reference, values of household substitution elasticities, effects on emissions from aging, and decreases in carbon intensity from technical change are additive in the long run. The most interesting result is that effects of aging on emissions are as large, or larger, than effects of technology in some cases. The principle trade-off in this result is the amount of aging in the household projections on the one hand, and the nature of the technical change on the other.
These results were presented at an Expert Meeting on Emissions Scenarios held by the Intergovernmental Panel on Climate Change and subsequently were submitted as a paper to a special issue of Energy Economics based on this meeting. After submitting this set of results, we have begun to extend them to incorporate changes in household size into the PET model, work which will be finalized in Year 4 (during the no-cost extension).
Future Activities:
In Year 3, we requested and received a 1-year no-cost extension to finalize work on the impact of immigration on emissions and to produce final papers for submission on our household projections.
Journal Articles on this Report : 1 Displayed | Download in RIS Format
| Other project views: | All 14 publications | 5 publications in selected types | All 2 journal articles |
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Dalton M, O’Neill B, Prskawetz A, Jiang L, Pitkin J. Population aging and future carbon emissions in the United States. Energy Economics 2008;30(2):642-675. |
R829801 (2005) |
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Supplemental Keywords:
population, consumption, emissions, climate change, households, anthropogenic stress, atmospheric carbon dioxide, behavior change, carbon emissions, climate variability, demographic, demographics, ecosystem sustainability, energy consumption, energy generation, global warming, greenhouse gases, human dimension, human population growth, population abundance, population environment technology model, socioeconomic indicators,, RFA, Air, Scientific Discipline, Economic, Social, & Behavioral Science Research Program, Economics & Decision Making, Economics, decision-making, Social Science, climate change, socioeconomic indicators, Global Climate Change, socioeconomics, human population growth, environmental monitoring, population environment technology model, climate variability, energy generation, behavior change, carbon emissions, ecosystem sustainability, human dimension, demographics, atmospheric carbon dioxide, greenhouse gases, population abundance, demographic, global warming , energy consumptionProgress and Final Reports:
Original AbstractThe perspectives, information and conclusions conveyed in research project abstracts, progress reports, final reports, journal abstracts and journal publications convey the viewpoints of the principal investigator and may not represent the views and policies of ORD and EPA. Conclusions drawn by the principal investigators have not been reviewed by the Agency.