How does aging affect the environment? We analyze this question using an overlapping generations model featuring uncertain lifetimes and environmental externalities. We show that whether aging is harmful to the environment depends on the curvature of utility function, which is measured by the degree of relative risk aversion. We also explore the implication of the results for environmental policy in an aging society.
- Environmental externality
- Intergenerational externality
- Overlapping generations
- Uncertain lifetimes
ASJC Scopus subject areas
- Economics and Econometrics
- Management, Monitoring, Policy and Law