Here’s the fix for Paris recommended by top economists (e.g. Stiglitz, Weitzman, Nordhaus), David MacKay (UK’s chief climate scientist) and others. This is also the approach that Elinor Ostrom found to work when there’s no government. It’s pretty simple.
The problem with Paris is that every country can pledge what they want, so their self-interest is to free-ride. As explained here this is a problem of the commons, and it has been studied extensively. The solution, as Elinor Ostrom documented, always involves reciprocity and trust.
So that’s it. Game over. Right? Re-trying the same thing and expecting a different outcome is insane (—Einstein). So Think Different. A common price is what everyone wants, even the cap-and-trade advocates (that’s what the trading part is for).
Positive reciprocity means I will help you if you help me, and negative reciprocity means I will harm you if you harm me. Both can support cooperation and almost all cooperation is the result of reciprocity. In a group, reciprocity requires a common commitment. The Kyoto negotiators tried ten different common commitments. The best knows is, “Everyone should cut emissions by the same amount, X, below their 1990 emission level.” If everyone agrees to the same X, that’s a common commitment. They came up with 10 different common formulas, but none of them worked.
Unfortunately, common commitments based on emission cuts or caps need to be complicated to be fair and once they get complicated, a lot of parties find fault with them so they never work out. And with the developing countries now included, a common emission commitment is now even more impossible.
Instead, we need pledge and review with a common price commitment. Every five years the common global price would be adjusted up as far as possible. Countries would feel safe advocating a high price because they would know they would not have to do it unless the whole coalition set that high a price.
This solves the famous free-rider problem, and the best place to start learning about it is our comment in Nature.