Closed shell molecules can have degenerate states? I read a paper which said that $\ce{CO2}$ despite having orbital degeneracy is stable and not subject to the Jahn-Teller effect because it is a linear molecule. But $\ce{CO2}$ is a closed shell molecule, so how can it have orbital degeneracy?
Degeneracy is usually based on symmetry. You can map the binding orbitals for each bond onto the other bond. So you can't distinguish between the molecular orbitals and its energies. 

Jahn-Teller doesn't apply for linear molecules because there is no distortion which can reduce the symmetry and reduce the system energy as well.