13 September 2020

Are Boomers to Blame for Fertility Rate and Climate Change?

The future has many challenges, one of which is climate change. Climate change is caused by many factors, but one that I will focus on now is global population. At almost 8 billion there are quite simply too many people on this earth. Each one emits a certain amount of carbon dioxide simply by living a normal life e.g. driving a car spews carbon dioxide from exhaust and eating meat wastes a significant amount of energy to keep cows and pig alive only to kill them.

As such, policies that reduce population growth (antinatalist policies) are better for the environment. When people think of antinatalist policies, one that comes to mind is China's One Child Policy, which was draconian. It featured forced sterilization, forced abortion, and government birth permits. However, there are ways of reducing fertility rate without resorting to draconian measures that cause suffering. In fact, most of the world has seen its fertility rate fall. Back in the 1960s, global fertility rate was about 5 babies per woman. Today is approximately 2.5 babies per woman. Once it gets to 2.1 babies per woman (i.e. replacement rate) then this means global population will cease to grow, which is a huge win for the environment.

But why did the world ex-China experience a fall in fertility rate without resorting to draconian measures? Many say it is urbanisation, female education, and availability of contraception. Urbanisation as opposed to rural living transforms babies from a productive asset that can work on the family work into a liability and recreational expense. Female education gives women other options rather than staying home and looking after children. It allows women to be productive rather than reproductive. Availability of contraception allows people to enjoy sex without the side-effect of having children.

However, there are two other factors that I believe helped to reduce fertility rate: housing unaffordability and welfare for the old. The term "greedy boomers" comes to mind because these policies help older people. High house prices help the old who purchased homes in the past and were able to gain wealth through the rise in house prices, and older people vote for welfare due to self-interest e.g. age pensions as well as many subsidies for medicines, etc.

Housing unaffordaibility, in my opinion, reduces fertility because it reduces the wealth of young people. It is important to make the distinction between wealth and income. Less wealth reduces fertility rate, but less income increases fertility rate. You need wealth (assets minus liabilities) in order to afford to raise children. However, the lower your income, the less money you lose if you stay home to take care of a child. Young people are more fertile and more likely to have children vs old people. However, housing unaffordability means many young people pay more money to buy a home or rent a home. If a young person rents a home, high house prices means they pay more rent assuming reasonably stable rental yield (i.e. rents rise as house prices rise). If a young person buys a home, if it is more expensive, they lose more money by living in the property because they miss out on renting it out and earning rental income. Whether you buy or rent, high house prices cause your wealth to be lower than what it would be if housing was affordable. This results in people deferring having children. Deferral of having children reduces the total number of children a woman can have, which reduces carbon emissions.

Welfare for the old works to reduce fertility rate in two ways. Firstly, in order for the old to receive welfare, more taxes need to be applied on the young in order to fund pensions, subsidised hospitals and age care homes, etc. More taxes on the young reduces their wealth, which reduces fertility rate, which helps the environment. Another way welfare for the old helps to reduce fertility rate is that it gives people the confidence that they will be looked after by their government when they are older, which means they do not need to have children and expect these children look after them. In fact, if these children will grow up in a world where they need to work hard in order to afford a place to live and in order to pay taxes that will be redistributed to the old, they won't have time to look after their parents because they are too busy working.

Both these two factors exhibit "virtuous cycle" properties e.g. for housing unaffordaibility, young people are forced to delay childbirth and work very hard in order to afford to get enough wealth to feel like they can afford children. Usually couples start to feel confident in having children once they save enough deposit or downpayment to get a mortgage from the bank to buy a home, but once they do, they now have an incentive to want that house to go up in value, which means they will vote for policies that cause more housing unaffordability, which puts more pressure on those even younger. For example, having been scrimping and saving under heavy taxes to fund boomers, millenials are now starting to buy homes in their thirties. They will want these house prices to go up and they will vote for policies such as tax benefits for housing. However, because this results in soaring house prices, this means that Gen Z will need to save up even more to get a mortgage, so they may need to work hard until they are in their 40s, and once Gen Z purchase as house, they too will vote for policies that cause housing unaffordaibility, which causes Gen A to wait until they are in their 50s to buy a house, and so on in a virtuous cycle that reduces fertility rate, carbon emissions, and saves the environment.

The same "virtuous cycle" is found in welfare for the old. Old people claim they are old, frail and need to be looked after, and they vote for policies that redistribute wealth from the young to the old. This puts pressure on the young who need to work harder in the face of high cost of housing and high taxes in order to get the wealth needed to have children. As a result, the young defer having children, but once the young get old, they have an incentive to keep the welfare going, so they will vote for policies that help the old, which puts more pressure on the young. Furthermore, as fertility rate drops, there are fewer and fewer young people who can vote, which means in a democracy, older people will continue to grow in political power and grab more money from the public purse, meaning the young are taxed even more, which means lower wealth, lower fertility rate, and lower carbon emissions.

In conclusion, "greedy boomers" help the environment by contributing greatly to global human population decline. Once millenials become the next boomers, we can expect the same behaviour and the same outcome, which is falling fertility rate, falling carbon emissions, and a better environment.

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