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You still need land for agriculture, industry, forests, animal habitats, etc. Also, not all of the land in that 0.25M km^2 is habitable nor suitable for other uses mentioned above.

I've heard some calculations that in theory you could have all 7 billion people living comfortably on 50% of the land while the other 50% could go to agriculture, industry, forestation, etc. but that would require geoengineering on an unprecedented scale, not to mention being very energy inefficient.

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