| Integrated Assessment models have become important tools for the analysis of global warming. To be effective tools, it is necessary for integrated assessment models to incorporate both interregional and intertemporal effects. These are needed in order to address the issues of equity and efficiency that are currently being debated in the international arena. We argue that the interregional and intertemporal effects can best be represented in an interregional Overlapping Generations model. Such a model has not been previously available.; We present a prototype of such a model, NSOLG, in which the world is divided into two regions, North and South. Generational structure, in the reference case, is represented by generations working for forty years and enjoying twenty years of retirement.; The nature of the Global Climate Change problem requires that both benefits and costs be compared over the next few centuries. Consequently, the magnitude of the discount rate is very significant. Discount rates obtained through both descriptive and prescriptive methodologies are used to compare the intergenerational costs of capital differentials.; The knowledge gained from NSOLG is used to discuss the implications for further integration of intergenerational structure into global climate change models. |
