Over the past decade, and especially over the past few years, climate change has emerged as one of the most important issues facing the international community. A global consensus now exists that climate change represents a significant potential threat to the world?s well-being. But there is disagreement about how and when to address that threat.

To motivate the discussion of both the timing and magnitude of emissions mitigation policy, the paper begins with an overview of the underlying science and economics. Understanding the uncertainties and differences in the timing of costs and benefits of climate change mitigation helps frame the extensive discussion of political economy issues that we examine in the second section. Specifically, we explore the interaction of economic and political concerns in enforcing emissions commitments and encouraging developing country participation within the ?voluntaristic? framework entailed by the current system of global governance. Given these political economy constraints, in the third section we evaluate the Kyoto Protocol and alternative formulations to climate change policy.

We conclude that modifications to the Kyoto framework are required to advance the effort to address climate change. At the very least, a thorough re-examination of alternative frameworks may prove helpful in building a global consensus behind a more effective strategy. The final section concludes with a discussion of one promising approach to addressing climate change: a flexible hybrid system that combines a permit trading program with the ability of governments to sell additional permits at a given maximum price.