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Reducing greenhouse gas emissions is a global collective action problem but humanity lacks a global government. A global government would create a mandatory compliance mechanism because this is the only way to incentivize a successful global effort. For almost three years, national governments have instead tried to reach a voluntary agreement in which countries agree on a fair allocation of the emissions reduction and the burden of costs. This has predictably failed and will continue to fail. The only hope for success is if some leading countries take domestic actions and apply carbon tariffs on imports from high-emission countries. These leading countries should try to join forces in “climate clubs” which, as they grow in economic importance, would motivate more countries to join, eventually reaching a tipping point for the development of a global compliance mechanism.
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