Two important points that can’t be said enough (especially #2 because not many people say it):
- Pricing carbon is the best way to mitigate climate change efficiently.
- Cap-and-trade vs carbon tax is a debate for the journals, not for public policy. If a politician proposes a carbon tax (or cap-and-trade), all economists should back it up with point #1. If an economist thinks that the other policy lever is best s/he should say something like Tirole does above. And this goes for pairing revenue from a carbon tax or cap-and-trade auction with income tax reductions / energy efficiency investments / free college tuition / etc.
Don’t let perfect be the enemy of good.