Ageing Impact on the Economy and Emissions in China: A Global Computable General Equilibrium Analysis

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.

Keywords

• population ageing
• age-specific consumption
• economic growth
• carbon emissions
• computable general equilibrium