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I read an article titled COVID-19 is awful. Climate change could be worse.

In this case, why was could used instead of can?

If I say COVID-19 is awful. Climate change can be worse, wouldn't make sense?

In English, do we use the past tense to indicate hypotheticals?

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This is not a general past tense, it is one of the meanings of the modal verb "could".

There is a reason for this in Old English (Old English had a proper subjunctive form and the past subjunctive of "cunnan" (= "know" or "know how") was "cuþe". "Cunnan" developed into "can" (with a development of sence from "know how" to "be able")and the subjunctive form developed into "could". The subjunctive has been almost completely lost in modern English, but a few words, like "could" still exist that developed from old subjunctive forms.)

You don't need to know the reason. You just learn that in English, hypotheticals may be expressed with the word "could". It's not really a past tense in modern English.

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