The two primary links between population and climate change that we examine in Part II – population's role in generating greenhouse gas (GHG) emissions and its role in affecting the ability of societies to adapt to the expected impacts of climate change – run through economic systems. Additionally, many of the justifications for population policy that we review in considering the policy implications of those links are based on economic effects. This chapter is intended to outline mainstream thinking in the field of population–economy–environment interactions in order to provide a framework for that analysis.

The population and economic development literature is extensive, and this chapter can at best only summarize a few basic themes. We first develop a basic neoclassical economic growth model, discussing in particular relationships between population growth and economic growth. We then add the environment link to form a neoclassical population–economy–environment model; we focus in particular on low-income settings, as it is these populations that are most vulnerable to the anticipated impacts of climate change. We examine the influence of population on the environment within the neoclassical model and contrast this with the view of ecological economics.

The population–environment model that predominates in the current economic literature and that has become influential in policy formulation is a basic neoclassical model extended to encompass poverty and low status of women and children. This model emphasizes how vulnerable populations react to environmental stress and how those reactions can set in motion a destructive downward spiral, or vicious circle.

The closing section looks at recent research on the macroeconomic impacts of population aging. Impacts of aging on productivity are not well understood.