Climate change and the representative agent

The artifice of an infinitely-lived representative agent is commonly invoked to balance the present costs and future benefits of climate stabilization policies. Since actual economies are populated by overlapping generations of finite-lived persons, this approach begs important questions of welfare aggregation. This paper compares the results of representative agent and overlapping generations models that are numerically calibrated based on standard assumptions regarding climate-economy interactions. Under two social choice rules - Pareto efficiency and classical utilitarianism - the models generate closely similar simulation results. In the absence of policies to redistribute income between present and future generations, efficient rates of carbon dioxide emissions abatement rise from 15 to 20% between the years 2000 and 2105. Under classical utilitarianism, in contrast, optimal control rates rise from 48 to 79% this same period.