A shrinking world - good thing or bad thing

The two issues are different but so closely related. An ageing population, where fewer babies are being born, will over time result in a shrinking population as those older people die and are not replaced.  A country needs a birth rate of about 2.1 babies per female, in order to keep replacing itself (leaving aside the question of migration).

So an ageing population with its low birth rate, leads to depopulation but may not be the only cause. Trends like the worldwide one which sees people moving to cities, also empties out rural populations. More than half the world’s population now lives in urban areas. What is quite common is for large cities to keep growing while rural populations stagnate or decline.

Japan has the dubious distinction of being the world’s guinea pig here. Although it doesn’t have the world’s lowest fertility rate (that honour goes to Singapore[1]), it’s no great fan of immigration and that has exacerbated the trends. By some estimates[2] Japan will be losing a million people a year by 2039 and stands to drop its overall population by up to a third this century. And Japan, while out the front of the pack, is not the only country in this position with much of Europe also facing depopulation, either in rural areas or for countries as a whole.

You might wonder why this is a concern to New Zealand. We have a birth rate above the OECD average[3] with a relatively youthful developed country population helped along by our post war baby boom. So, here we are with one of the lowest old age dependency ratios in the OCED which means our young people aren’t supporting so many retirees from their taxes. In fact New Zealand isn’t predicted to stop growing until towards the end of the 21^st century.

While this all sounds good, when we look a bit deeper we find similar trends to Japan, Spain and others.

Auckland is the king pin for our demographic “youthfulness”. The Auckland region holds 33.4% of our total population[4] and 39% of its population was born overseas, reflecting the fact that it recorded the highest net gain of migrants between 1996 and 2013 and was one of only four regions to experience any net growth.[5] It is in fact one of the most diverse cities in the world, tying for third with places like London (after Toronto at number one and Brussels at number two)[6].

The picture for the rest of New Zealand? Not so rosy.

Between 1996 and 2013 one third of territorial authority areas declined[7]. Over the next few decades we will see most territorial authorities start to reach their peak and then begin shrinking.[8] What will that mean for school, hospitals, roading, housing markets, employment? How will councils afford to maintain services and infrastructure with steadily depleting rates bases?

It’s funny to think that not so long ago we were worried about a world population burgeoning out of control to 20 billion or more. Now it looks like we’ll top out at 10 or 11 billion by the end of this century. How quickly things have changed – explosion to impending implosion.

So the brakes we wanted on population growth have been applied and now we have to reimagine a future without growth. We’ve always had lots of younger people, producing and consuming and driving our economies forward. What does a more stable, less growth driven future look like?

Japan is struggling with these issues right now. I was lucky enough to meet Dr Peter Matanle of Sheffield University who has been studying these issues for some time. With many rural communities in decline he described seeing areas in Japan with minimal economic activity, closing schools, abandoned buildings and agricultural land reverting to scrub. Forest is starting to encroach on houses, troops of monkeys raid allotments, deer wander through empty towns. But because there are still some elderly people living in these areas the basic services of rubbish collection, power supply, road clearing in snowy winters all have to continue – at some cost.

However there is a potential upside and Dr Matanle has coined the term “depopulation dividend” to describe the benefits that we might see from shrinking populations. These include some potentially major environmental benefits such as a reduction in CO2 emissions and improved biodiversity as more land is returned to wildlife habitats.

There is very little guidance on what policies governments, local or central, should adopt to prepare for this end to growth. Fortunately for New Zealand our Royal Society is addressing that gap with a project led by Professor Natalie Jackson of Massey University. The project will run for 3 years, wrapping up in March 2017.The project is very aptly named:

Tai Timu Tangata. Tahoa e?

The ebbing of the human tide, what will it mean for the people?