Abstract : Following the UN Framework Convention on Climate Change , countries will negotiate in Kyoto this December an agreement to mitigate greenhouse gas emissions. Here we examine optimal CO2 policies, given long-term constraints on atmospheric concentrations. Our analysis highlights the interplay of uncertainty and socioeconomic inertia. We find that the ‘integrated assessment' models so far applied under-represent inertia, and we show that higher adjustment costs make it optimal to spread the effort across generations and increase the costs of deferring abatement. Balancing the costs of early action against the potentially higher costs of a more rapid forced subsequent transition, we show that early attention to the carbon content of new and replacement investments reduces the exposure of both the environmental and the economic systems to the risks of costly and unpleasant surprises. If there is a significant probability of having to stay below a doubling of atmospheric CO2-equivalent, deferring abatement may prove costly.