Australia's future population — facing up to difficult choices

Our scenarios suggest that aggressive adoption of technology to address environmental problems shows much promise. Smart designs are already in existence for houses and motor vehicles which can significantly reduce energy use and greenhouse gas emissions. But counteracting this are consumer demands for larger buildings, higher-quality goods, luxury, more powerful vehicles and more frequent air travel.

An efficient consumer-led economy generally embraces growing volumes of cheaper goods and services, which in turn consume increasing levels of energy and material.

Unfortunately, our study suggests that better cars and houses will have little moderating effect on total energy use and subsequent greenhouse emissions. If vehicle and housing policy is to affect future energy use, then each year's complement of new houses and cars must meet the highest, rather than the average, technical standards.

While pricing policies can moderate the use of resources such as energy and water, they are seldom applied to stabilise resource use in a physical sense.

The direct and indirect requirements for energy, water and land are directly related to per-capita expenditure. As per-capita expenditure grows, so too does the resource quotient required to produce the sum total of goods and services included in total personal consumption.

Finally, there is the 'rebound effect' where efficiencies gained in one sector give savings (in resources or money) that inevitably migrate to stimulate resource use in another sector.

Our study found that direct population effects (the more people the greater the impact) are important in three areas of resource consumption and environmental quality: stocks of marine fish, stocks of oil and air quality.

The study highlights a growing gap between domestic oil production and domestic requirements past 2010. The higher the rate of population growth, the larger the gap. While imports may fill the gap in the medium term, meeting demands in the longer term will require multiple responses including the discovery of new petroleum provinces, the widespread use of energy efficient vehicles and the development of other fuel sources such as natural gas, oil shale and biomass.

Surprisingly, our study finds that water availability is not likely to be a constraining factor under any of the population scenarios, provided that big changes occur over the next 50 years.

According to the report, without a focus on the variables that change slowly, such as population size, policy design for the physical economy is running blind. We should be focusing on, for example, population aging with a 50-year timeframe.

The study found that a lower population size (20 million people by 2050 driven by an assumption of zero net immigration) resulted in the stabilisation of a range of environmental quality issues (such as emissions in the airsheds of capital cities) and resource use issues (eg household water use). Total greenhouse gas emissions were lower and the physical trade balance was higher.

The key challenges under the low-population scenario related to a rapidly declining population after the year 2100, a larger proportion of aged citizens and the possibility that health-care and pension systems will not be able to cope. It suggests that without substantial structural change, maintaining economic growth in a declining population could be difficult.