Abstract
This paper analyzes the implications of using an overlapping generations model for simulating the effects of greenhouse gas abatement policies rather than the traditional approach based on an infinitely-lived agent. The overlapping generations framework has many appealing characteristics. In particular, by not aggregating different generations, it avoids imposing implicitly a social welfare function that discounts the utility of people living in the future. The results show that the costs of imposing a tax on CO 2 emissions are highly unequally distributed. Generations to be born a century from now stand to incur substantial losses while those alive in the near future will suffer much less and the current old may even experience a gain.
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