Aging Populations, Resource Demand, and the Future of Growth

While the past century has seen extraordinary growth in human population, energy use, and material consumption, the future demands a more balanced and sustainable trajectory—not just in how much we grow, but in how we define progress itself.

The Demographic-Economic Nexus: Aging Populations, Resource Demand, and the Future of Growth

I. The Global Acceleration of Population Aging

Population aging—the increasing proportion of older individuals in a population—is one of the most significant demographic shifts of the 21st century. Although virtually all countries are experiencing this trend to varying degrees, the pace and scale of aging differ dramatically across regions, with profound implications for labor markets, fiscal policy, and healthcare systems.

Advanced Economies: Rapid Aging and Fiscal Stress

Japan represents the most extreme case. In 1990, just 2% of its population was aged 80 or older. By 2015, this figure had risen to nearly 8%, and projections from the United Nations and OECD suggest it will nearly double to 15% by 2050. South Korea, still demographically younger, is expected to undergo an even faster transition. In 2015, fewer than 2% of South Koreans were over 80, but by 2050, this proportion will mirror Japan’s current level, demonstrating the “compression of aging”—a phenomenon in which developing economies age more rapidly than developed ones did historically.

These trends are mirrored across most OECD countries. The old-age dependency ratio—the number of individuals aged 65 and older relative to those of working age (15–64)—was 4.2:1 in 2012. This ratio is projected to decline to 2.1:1 by 2050, effectively halving the tax base per retiree and pressuring pension systems, payroll-based tax revenues, and eldercare services.

Emerging Economies: A Delayed but Inevitable Shift

Emerging economies are aging at a slower but accelerating pace. In 2015, only 1.5% of the population in China and Brazil was aged 80 or older. However, by 2050, this figure is expected to exceed 8% in China and approach 7% in Brazil, signifying that even large middle-income nations will confront aging-induced economic challenges.

While population aging contributes to rising healthcare expenditures, it is not the principal cost driver. According to the OECD (2015), technological advances and income growth are more significant contributors to healthcare spending increases. Nonetheless, aging remains a structural factor that interacts with chronic disease prevalence, long-term care needs, and end-of-life medical costs.

II. The Macroeconomic Impact of Aging Populations

The economic implications of population aging are multifaceted:

1. Labor Force Shrinkage: A smaller working-age population constrains labor supply, productivity, and potentially, economic growth. OECD estimates suggest that aging alone could reduce potential GDP growth in some countries by 0.5 to 1 percentage point annually.

2. Revenue Challenges: With fewer workers contributing to payroll taxes, and more retirees drawing pensions and healthcare benefits, many nations face structural budget imbalances. Addressing this may require higher taxes, longer working lives, or reduced benefits—each with political trade-offs.

3. Shifts in Consumption: Older populations tend to consume differently—favoring healthcare, housing, and financial services over durable goods or education—thus reshaping entire sectors of national economies.

4. Intergenerational Equity: As fiscal pressures mount, policy decisions will increasingly hinge on generational equity—balancing the needs of retirees with the opportunities available to younger cohorts.

III. Population Growth and Global Energy Demand

Over the past century, population growth and energy consumption have risen dramatically—though not in lockstep.

In 1915, the global population was approximately 1.8 billion. By 2025, it is projected to reach nearly 8.1 billion, a 4.5-fold increase. However, total energy consumption has increased by more than 12 times during the same period, while per capita energy use has only doubled.

This asymmetry suggests that energy demand is driven by more than just population—it is also shaped by:

• Urbanization

• Industrialization

• Economic growth (especially in Asia)

• Lifestyle changes, such as increased use of air conditioning, automobiles, and digital devices

Today, the global average energy consumption is about 75–80 million BTUs per person per year, but this masks wide disparities. For example:

• The average American consumes over 300 million BTUs per year

• The average Indian consumes fewer than 25 million

As countries like India, Nigeria, and Indonesia become wealthier, their per capita energy use is expected to rise substantially, further increasing global energy demand—unless offset by energy efficiency gains or a rapid transition to renewables.

IV. Material Intensity: Copper and Steel as Proxies of Development

Population growth also correlates strongly with materials consumption, especially industrial metals like copper and steel, which are critical to infrastructure, electronics, transportation, and housing.

Copper

In 1870, global copper production amounted to just 5 ounces per person annually. Today, that figure stands at approximately 5 pounds per person—a 16-fold increase in per capita usage. When adjusted for population growth (a roughly 7-fold increase since 1870), total global copper output has grown nearly 100-fold.

This growth reflects the rising demand for:

• Electrical wiring in homes and industrial applications

• Renewable energy systems (e.g., wind turbines, solar panels)

• Electric vehicles (which use 2–4 times more copper than gasoline cars)

With copper already in tight supply, the International Energy Agency (IEA) warns that global copper demand could double by 2040 under aggressive electrification scenarios, placing immense pressure on mining and recycling systems.

Steel

Steel usage has seen even more dramatic increases. In 1870, global steel production averaged 1 pound per person annually. Today, that figure is closer to 350 pounds per person—a 350-fold increase in per capita terms, and an estimated 2,450-fold increase in total production when factoring in population growth.

Steel is foundational to modern economies—used in:

• Buildings and bridges

• Railroads and shipping

• Cars and machinery

China alone produces over 50% of the world’s steel today, a figure unheard of even 25 years ago. Yet questions remain about the sustainability of this trajectory. Steel is carbon-intensive, and its production accounts for 7–9% of global CO₂ emissions. Achieving net-zero targets will require breakthroughs in green steel technology or significant shifts in material usage.

V. The Limits to Growth?

The long-term sustainability of this growth trajectory—in aging, energy, and resource use—is increasingly in question.

• Demographics: Shrinking workforces may stall GDP growth, alter consumption patterns, and strain social contracts.

• Energy: Without significant efficiency gains or a decisive shift to renewables, meeting the energy demands of a larger and wealthier global population may exceed planetary boundaries.

• Materials: Finite reserves of metals like copper, rare earths, and lithium raise concerns about supply bottlenecks. Recycling will be essential, but recycling alone cannot meet surging demand.

The “Limits to Growth” argument, popularized by the 1972 Club of Rome report, may have been premature in its predictions, but its core thesis—that exponential resource use cannot continue indefinitely on a finite planet—is increasingly relevant. Today, we face an interconnected set of constraints involving demographics, resources, climate, and technological adaptation.

VI. Immediate Actions to Begin Alleviating the Threat

While long-term strategies and systemic shifts are critical, there are concrete steps that can be taken now to begin mitigating the risks posed by population aging and unsustainable resource consumption. These actions are technically feasible, cost-effective in many cases, and scalable.

1. Implement Targeted Workforce Extension Programs

Governments can raise labor force participation rates among older adults through direct policy and employer incentives:

• Subsidize part-time or flexible employment programs for workers aged 60+ in sectors like education, healthcare, and administration.

• Eliminate mandatory retirement ages where they still exist and offer tax breaks to employers that hire or retain older workers.

• Support retraining and upskilling programs tailored specifically to older adults, focusing on digital literacy and caregiving professions.

2. Mandate Copper and Steel Recycling in Urban Redevelopment

• Enforce strict material recovery standards on all public construction and demolition projects.

• Require material passports for new buildings that log the type and quantity of metals used.

• Ban landfill disposal of industrial copper and steel waste and fund recovery facilities through existing waste fees.

3. Deploy Heat Pump and Electrification Retrofits at Scale

• Subsidize air- and ground-source heat pumps for low- and middle-income households.

• Mandate replacement of fossil fuel boilers in government buildings and new housing projects with electric systems.

• Bulk purchase and install heat pumps across publicly managed housing stock.

4. Accelerate Installation of Rooftop Solar on Public Buildings

• Install solar panels on all new and existing schools, fire stations, and government offices.

• Create municipal solar utilities that supply energy to low-income residents.

• Offer direct installation contracts to minority- and women-owned energy startups.

5. Create Elder Home Care Corps Using National Service Models

• Recruit unemployed or underemployed adults into a national eldercare corps, modeled on programs like AmeriCorps.

• Offer stipends, healthcare, and debt relief in return for 1–2 years of service.

• Match caregivers with local residents, supporting aging in place and reducing institutional care costs.

VII. Conclusion: Intersecting Crises, Intertwined Futures

We are entering a world of converging demographic and environmental transitions. Aging populations will transform economic structures, while continued population and consumption growth will test the planet’s ecological limits. Addressing these challenges requires:

• Integrated policy planning, not siloed responses

• Technological innovation, especially in energy, materials, and healthcare

• Reimagined economic models, moving beyond GDP as the sole measure of well-being

References:

1. OECD (2015). Fiscal Sustainability of Health Systems: Bridging Health and Finance Perspectives. OECD Publishing.

2. OECD (2013). Health at a Glance 2013: OECD Indicators. OECD Publishing.

3. United Nations, Department of Economic and Social Affairs, Population Division (2022). World Population Prospects 2022.

4. International Energy Agency (IEA). The Role of Critical Minerals in Clean Energy Transitions. 2021.

5. World Bank (2023). Global Material Footprint and Circular Economy Report.

6. Club of Rome (1972). The Limits to Growth.