On the Beach? Sustainability, Optimal Pollution, and Optimal Population

Abstract

Is it possible that the utility maximizing behavior leads the mankind to destruction? We develop a model with optimal pollution and optimal population in which population growth rate decreases along with pollution. We study if the optimal path is demographically sustainable, i.e. if it can provide non-decreasing consumption for a non-decreasing population. We find that demographic sustainability is impossible without technical progress. Technical progress, however, does not necessarily lead to demographically sustainable growth.