Climate action with revenue recycling has benefits for poverty, inequality and well-being.

Existing estimates of optimal climate policy ignore the possibility that carbon tax revenues could be used in a progressive way; model results therefore typically imply that near-term climate action comes at some cost to the poor. Using the Nested Inequalities Climate Economy (NICE) model, we show that an equal per capita refund of carbon tax revenues implies that achieving a 2°C target can pay large and immediate dividends for improving well-being, reducing inequality and alleviating poverty. In an optimal policy calculation that weighs the benefits against the costs of mitigation, the recommended policy is characterized by aggressive near-term climate action followed by a slower climb towards full decarbonization; this pattern-which is driven by a carbon revenue Laffer curve-prevents runaway warming while also preserving tax revenues for redistribution. Accounting for these dynamics corrects a long-standing bias against strong immediate climate action in the optimal policy literature.

Five Lessons from COVID-19 for Advancing Climate Change Mitigation.

The nexus of COVID-19 and climate change has so far brought attention to short-term greenhouse gas (GHG) emissions reductions, public health responses, and clean recovery stimulus packages. We take a more holistic approach, making five broad comparisons between the crises with five associated lessons for climate change mitigation policy. First, delay is costly. Second, policy design must overcome biases to human judgment. Third, inequality can be exacerbated without timely action. Fourth, global problems require multiple forms of international cooperation. Fifth, transparency of normative positions is needed to navigate value judgments at the science-policy interface. Learning from policy challenges during the COVID-19 crisis could enhance efforts to reduce GHG emissions and prepare humanity for future crises.