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The Carbon-Tax Opportunity

The pandemic-related collapse in oil prices will likely make renewable energy less competitive, just at a time when the world should be engineering a climate-friendly recovery. In fact, policymakers have an excellent opportunity to advance the transition to a zero-carbon economy.

WASHINGTON, DC – The COVID-19 pandemic has brought economic and social activity around the world to a near standstill. As a result, carbon dioxide emissions have declined sharply, and the skies above some large cities are clean and clear for the first time in decades.

But “degrowth” is not a sustainable strategy for averting environmental disaster. Humanity should protect itself from climate change not by reducing economic activity, but rather by making it more resilient, robust, and sustainable.

The ongoing pandemic has powerfully demonstrated the cost of neglecting catastrophic tail risks. The risks tied to climate change, while unfolding more gradually, are at least as great as those posed by COVID-19. Although the international community is rightly focusing its efforts on the immediate health and economic crisis, it should not lose sight of this threat.

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