COVID-19 and Climate Change: A Tale of Two Global Problems

In this paper, we examine the similarities and the differences between two global problems, the coronavirus pandemic and climate change, and the extent to which the experience with the COVID-19 pandemic can be of use for tackling climate change. We show that both problems share the same microeconomic foundations, involving an overprovision of a global public bad. In addition, they entail externalities whose correction comes at very high economic and social costs. We leverage on a well-established problem such as climate change that has been studied for several years now, to highlight the common traits with the COVID-19 pandemic, but also important differences. The COVID-19 crisis is itself a reality check for climate policy, international governance and prevention in general. Indeed, the COVID-19 pandemic is a mock laboratory of climate change, where the time scale of unfolding events is reduced from decades to days. While the former is often measured in days, weeks, months, years, the latter is measured in years, decades, and centuries.