Reports of Kyoto's death seem to have been exaggerated. Just when
most observers were writing Kyoto's obituary, the international
community reached a breakthrough in Bonn, resolving many of the key
political issues and thereby breathing new life into the Kyoto
process. But although Kyoto has shown surprising resilience, it is
hardly a done deal. Much work remains before it enters into force,
let alone before it can be considered a success. Moreover, despite
the events in Bonn, the United States does not appear likely to join
Kyoto anytime soon. This means that even if Kyoto does go forward, it
will apply to only about a quarter of the world's emissions of
greenhouse gases, with no near-term prospect for expanding its
coverage.

Thus, amid justifiable celebration of the Bonn agreement, a critical
assessment is in order. While Kyoto is an impressive achievement,
bearing little resemblance to the bogeyman of conservative lore, the
very features that make Kyoto so remarkable--its novelty, complexity
and ambition--may also undermine its long-term workability. Even many
of us working over the past few years to bring it into effect were
painfully aware of its weaknesses. Generally, our response was to
suspend disbelief and soldier on. To us, the negotiations had the
same quality that Woody Allen once ascribed to relationships: like a
shark, they had to move forward or they would die. Kyoto may have
problems, we acknowledged, but it's the only game in town. Better to
push it over the finish line and hope it works than to start all over
again, with no guarantee of doing better.

The silver lining in President Bush's repudiation of Kyoto is that
it has created the possibility of a new, more open-ended dialogue
about climate change policy. For the past five years, Kyoto has
sucked most of the oxygen out of this debate. Even in the wake of the
U.S. decision, it has continued to cast a long shadow, with
supporters proposing modest fixes and opponents (including the
President) concentrating on Kyoto's sins without--so far,
anyway--proposing any constructive alternative.

In going forward, the first step is to move beyond the ritualistic
justifications and denunciations of Kyoto in order to take stock of
the deeper lessons it teaches. Fundamentally, Kyoto treats a
long-term problem as though it were a short-term crisis. Just as
importantly, its architecture reflects a rationalist paradigm that
tends to ignore the messy institutional and political realities of
international life. Kyoto attempts to create a complex, global system
from scratch rather than proceeding experientially, building from the
bottom up. In considering what to do next, we are well advised to
remember that most successful international regimes such as the GATT
have developed differently, starting small or simply (or both) and
adding parties and complexity in a step-by-step manner.

A Retrospective on the Climate Change Negotiations

Whatever its weaknesses, that Kyoto was adopted at all was a
remarkable accomplishment. Climate change is perhaps the most
intractable issue facing the international community. Most scientists
believe the problem is serious, but many uncertainties remain,
allowing skeptics to argue for delay until more is known. Most of its
adverse effects will not be apparent for many decades, well beyond
the planning horizons of most governments or individuals. It requires
an unprecedented level of international cooperation, since emissions
everywhere contribute to the problem. And it is ubiquitous. Virtually
every human activity--manufacturing, transportation,
agriculture--emits greenhouse gases. Climate change thus presents
policymakers with the worst imaginable combination of features: it
requires them to begin taking actions now, affecting most aspects of
daily life, to combat a distant and uncertain threat.

When climate change first emerged as a political issue in the late
1980s, the initial international response focused on the science. In
1988, with the active support of the United States, the United
Nations established the IntergovernmentalPanel on Climate Change to
provide periodic scientific assessments (the most recent one appeared
earlier this year). Very quickly, however, the European Union and
small island states (who fear being inundated by rising seas) began
to call for mandatory reductions of carbon dioxide and other
greenhouse gases. The debate ever since has focused on whether to
establish national emissions targets and, if so, at what level of
stringency and with what mechanisms of implementation.

In the initial round of negotiations prior to the 1992 Earth Summit
in Rio de Janeiro, the first Bush Administration successfully fended
off European efforts to establish legally-binding emission targets.
Instead, the 1992 Framework Convention on Climate Change contains
only a non-binding political aim, together with a long-term objective
(stabilization of greenhouse gas concentrations at non-dangerous
levels) and various principles to guide the evolution of the regime
(e.g., equity between industrialized and developing countries,
cost-effectiveness and precaution).

The ink had barely dried on the Framework Convention, however, when
many countries began to argue that the Convention's "commitments"
were inadequate. The new Clinton Administration agreed and in 1995
accepted the Berlin Mandate, which called for the negotiation of
additional commitments for industrialized countries. Two years later,
the negotiations concluded with the adoption of the Kyoto Protocol.

As one of the most innovative and ambitious international agreements
ever negotiated, Kyoto has inspired hyperbole by proponents and
opponents alike. The real story is, as usual, more complex.

Kyoto sets forth both a long-term architecture and short-term
commitments. At the core of the long-term architecture are
legally-binding national commitments to reduce total greenhouse gas
emissions, which apply to multiple-year "commitment periods" and
govern emissions of six greenhouse gases, among them carbon dioxide.
In achieving these commitments, Kyoto allows countries considerable
flexibility. It prescribes a result, but lets countries determine how
to achieve that result, including through the use of market-based
mechanisms such as emissions trading or through forestry and
agricultural activities that remove carbon from the atmosphere
(so-called carbon "sinks").

Generally, critics focus not on Kyoto's long-term architecture but on
its short-term emission targets for the five-year period running from
2008 to 2012. These targets, however, were intended to be the first
word on combating climate change, not the last. Of course they were
politically rather than scientifically based and did not include
developing countries. But no emissions target could have had a
scientific basis since scientists do not (and probably cannot) agree
on what levels of greenhouse gases are "safe." The Kyoto targets at
least head the world in what most scientists agree is the right
direction, toward lower emissions, and could eventually include
developing countries. In the long term, developing country targets
will be essential for stabilizing emissions. Kyoto does not preclude
such targets; it merely reflects the view that industrialized
countries should take the lead in reducing emissions, both because
they created the problem in the first place (through their historical
emissions) and have the greatest capacity to respond.

Although, by some measures, the Kyoto targets are relatively modest
and by themselves would not significantly curb global warming, even
so they probably require too much too soon both politically and
economically. The U.S. target, for example, is "only" a seven percent
reduction from 1990 emissions levels. But given high economic growth
over the past decade (and the lack of significant domestic action to
curb the resulting increase in emissions), the reductions from
business-as-usual projections for the 2008-2012 period would be about
30-35 percent. Although significant opportunities may exist to reduce
emissions at little or no cost (particularly when other environmental
benefits, such as reduced local air pollution, are factored in), the
extent of these "no regrets" options is uncertain. At the same time,
the economic costs of Kyoto could be severe, particularly since it
would require companies to retrofit or prematurely retire existing
capital stocks, rather than take advantage of the regular pattern of
capital turnover, phasing out equipment as it becomes obsolete. An
important aspect of the Bonn agreement was effectively to make the
Kyoto targets easier for some key countries, including Japan.

The Bonn Surprise

The Kyoto agreement left many important issues open. The
international negotiations ever since have tried to put meat on
Kyoto's bones by elaborating detailed rules for how Kyoto's market
mechanisms, carbon sinks provisions and compliance system will work.
Pending adoption of these rules, few industrialized countries have
been willing to proceed with ratification. Originally, the Kyoto
rules were scheduled for completion in November 2000 in The Hague.
But The Hague conference broke down without any agreement, so
countries decided to continue the negotiations in Bonn during July
2001.

To the surprise of most observers, the Bonn meeting succeeded where
The Hague meeting had failed. Countries reached agreement on most of
the main outstanding issues, thereby paving the way for ratification.
Many factors contributed to Bonn's unexpected success. At The Hague,
countries played a game of chicken, hoping that others would relent
first. They waited so long to advance compromise proposals that there
was insufficient time even to understand what others were suggesting,
let alone engage in genuine negotiation. At Bonn, countries realized
that they could not count on pulling a rabbit out of the hat at the
last minute and that, if they continued to engage in brinkmanship, a
second failure could kill Kyoto altogether. Moreover, since The Hague
failure, they had had months to analyze and digest potential
compromises.

But perhaps the decisive factor contributing to Bonn's success was
President Bush's own actions. Before the meeting, most observers had
expected that his rejection of Kyoto would deflate the process,
depriving it of the momentum necessary for success. But Bush's
decision had the opposite effect: It united countries around the
Kyoto Protocol and galvanized them into action. The peremptory way in
which the administration acted--repudiating years of multilateral
work in response to domestic special interests, without consulting
other countries or undertaking a serious policy review--combined with
his failure to offer a credible alternative, stuck in other
countries' craws. When the spokesman for the developing countries
declared at the end of the meeting that the Bonn agreement
represented the triumph of multilateralism over unilateralism, he
received a rousing ovation. The Bush Administration compounded its
mistakes by taunting the Europeans for not having ratified Kyoto,
implying that they were hypocrites. Thus, the European Union came to
Bonn determined to make whatever compromises were necessary to reach
agreement and so prove Bush wrong.

American disengagement from the Bonn negotiations also made agreement
easier from a substantive standpoint. In The Hague, the Clinton
Administration felt it had to win on virtually every issue to have
even a prayer of overcoming Senate opposition to Kyoto. By contrast,
other countries had fewer walk-away issues and thus could agree more
easily on a compromise package in Bonn. In particular, the U.S.
absence made one of the most contentious issues easier to resolve:
how much credit to give for the carbon sucked out of the atmosphere
by carbon "sinks." With the United States out, the Europeans had
plenty of room to accommodate the demands for sink credits by Japan
and Canada, since they no longer had to satisfy the much larger
demands of the United States.

Four Lessons of the Kyoto Process

Despite the Bonn agreement, Kyoto has a long way to go before we can
assess its effectiveness in combating climate change. In the
meantime, the Bonn agreement now makes it more likely that the United
States will go its separate way, at least in the near term, rather
than re-engage directly in the ongoing global negotiations. In
charting a future course, what lessons can we learn from the Kyoto
process? At the root of Kyoto's troubles has been the failure to
observe four basic precepts of sound treaty-making.

Lesson 1: Walk Before You Run

Benjamin Franklin once remarked that the most exquisite folly is
reason spun too fine. If Kyoto ultimately fails, this could be its
epitaph. Rather than starting simply, with an agreement that is easy
to implement and fulfill, it takes a grandiose approach, establishing
ambitious emission reduction targets and an elaborate architecture
whose success will depend on an extraordinary degree of international
cooperation and good faith--commodities in short supply in the
climate change regime. For example:

*Kyoto controls not only carbon dioxide, the principal greenhouse
gas, but also five other gases, including methane and nitrous oxide,
that are difficult to monitor reliably.

*Kyoto contemplates the first full-blown system of international
emissions trading. Although emissions trading has been used
successfully in the United States to combat acid rain, implementing
such a system internationally will involve a host of difficult issues
relating to eligibility, liability and compliance.

*As a result of the Bonn agreement, countries can receive credit for
carbon removed from the atmosphere by carbon "sinks"--for example,
forests and farmlands. But carbon sinks are natural phenomenon that
increase and decrease for a variety of reasons, not just as a result
of human activities. Determining the degree to which countries should
receive credit (or debits) for such changes raises extraordinarily
difficult conceptual and scientific issues, which are generally
glossed over in the Bonn agreement.

*Kyoto creates a Clean Development Mechanism that will allow
industrialized countries to receive credit for emission reduction
projects in developing countries. But implementing this mechanism
will require the creation of an elaborate institutional structure to
oversee the process.

The desire of the United States to include these and many other
equally complicated elements in Kyoto was understandable. Supporters
justified each as providing the flexibility needed to meet stringent
emission reduction targets. Perhaps if the European Union had not
pushed for such ambitious targets, the United States would have
sought fewer bells and whistles but, be that as it may, the end
result was a highly complex agreement requiring much further
elaboration. Although the Bonn agreement resolved the most
contentious political issues, and adoption of the detailed rules for
emissions trading (the Clean Development Mechanism and carbon sinks)
appears within reach at a meeting this fall in Marrakesh, whether the
new rules and institutions will actually work remains uncertain. In
most cases, they involve novel mechanisms that would tax the capacity
of even established, highly-developed national institutions, much
less comparatively new international institutions that have yet to
establish their authority or to develop traditions of good faith and
cooperation.

The history of international institutions suggests that successful
institutions tend to start small and build. The GATT, for example,
began with a relatively small number of countries, addressed a few
core issues, and had a relatively simple institutional structure. The
1992 Framework Convention began down a similar path: although it
involved many more countries than the original GATT, it established
only general principles and obligations to address climate change,
together with basic institutions and procedures. Before this system
had been given a serious chance to develop, however, it was
supplanted by the Kyoto Protocol, which in essence seeks a full-blown
regime all at once. In moving forward, the better approach would be
to proceed incrementally, adding stringency and complexity over time
as states gain confidence in the regime. Thiswould avoid overtaxing
the regime before a sense of community has developed among the
parties. It would also allow states to test out ideas and learn from
experience. Such an approach would not create the illusion of quick
results, as Kyoto has. But it might build a more solid edifice
appropriate for a long-term problem such as climate change.

Lesson 2: No Representation Without Taxation

Like a contract, a treaty typically involves a mutual exchange of
promises among the parties. Under the Montreal Protocol, for example,
the United States agreed to limit its use of ozone-depleting
substances in exchange for a similar commitment from other countries.
The Kyoto Protocol, however, does not adhere to this basic tenet of
treaty practice. Though negotiated by virtually the entire world
community, it represents a promise by only a limited group of
countries to control their emissions.

Critics of Kyoto claim that it is unfair that developing countries
such as China and India have no emission reduction targets. But the
unfairness lies less in the lack of developing country targets than
in the fact that they have been allowed, nevertheless, to be
full-fledged participants in the negotiations. This has created the
odd situation that developing countries have had a significant say in
determining rules that would not apply to themselves. Indeed, over
the past several years, developing countries even threatened to block
the adoption of the Kyoto rules unless they received significant
financial assistance. In Bonn, they extracted agreement to create
three new international funds, as well as a pledge from the European
Union and other developed countries for significant climate change
funding. In effect, developing countries have successfully demanded
that developed countries pay them for the privilege of making
economic sacrifices to address climate change.

This paradoxical situation stemmed from the 1995 Berlin Mandate,
which initiated the Kyoto negotiations. Prior to the Berlin meeting,
U.S. negotiators had briefly considered undertaking the Kyoto
negotiations among a smaller group of countries that were willing to
assume emission reduction targets. Ultimately, they decided to pursue
the negotiations under the Climate Convention (which includes
virtually every country in the world), seeking a negotiating mandate
that left open the possibility of designating developing country
emission targets. When developing countries opposed this approach and
insisted that the mandate specifically rule out any new commitments
for themselves, the United States had the choice of whether to
continue under the Climate Convention or to seek a separate agreement
among fewer, more like-minded states. It opted for the former in the
hope that it could get around the Berlin Mandate and bring developing
countries on board; proceeding separately, in contrast, would have
meant giving up any pretense of obtaining developing country
participation.

In retrospect, the Berlin Mandate presented the United States and
other industrialized countries with the worst of both worlds: on the
one hand, it specifically ruled out developing country commitments,
at least for the first commitment period; on the other hand, it
allowed them to remain full-fledged participants in the negotiations.
A better approach would have been to say at the outset: only
countries willing to pay (in the coin of obligation) may play. This
would have presented developing countries with a choice: acknowledge
a willingness to accept new commitments or stay out of the
negotiations altogether. As it was, developing countries have had it
both ways: they got to negotiate the international rules without
having to acknowledge that those rules would ever apply to them.

Undoubtedly, most developing countries would have stayed out of the
negotiations if participating meant eventually accepting mandatory
emission limitations. Far from being a problem, however, this would
have had two benefits. First, the Kyoto negotiations would have been
more manageable, involving fewer countries and issues. They wouldnot
have been saddled with the baggage associated with UN negotiations,
including rigid negotiating groups and a disproportionate influence
for small countries. Second, the dynamic vis-Ã -vis developing
countries might have been quite different. If industrialized
countries had proceeded separately, at least some developing
countries might have decided to accept emission targets in order to
join the regime and sell their cheap emission reductions to Europe
and the United States. In contrast to the Kyoto regime, which gives
harder-line developing states such as China and India a veto,
industrialized countries would have kept control of admissions.
Indeed, over time, developing countries might have begun to clamor
for acceptance into the "club" in order to get the benefits of
emission trading. By starting small and building out over time, the
climate change regime could have developed along the same lines as
the GATT, with a comparatively small, like-minded group of states
negotiating the initial rules, allowing others to join as they became
willing to accept the obligations of membership.

Lesson 3: "America First"

It is almost a commonplace that successful foreign policy must grow
out of domestic political consensus. Certainly this is true in the
United States with respect to environmental issues, where virtually
every successful international regime has had its roots in U.S.
domestic law. The most spectacular success--the Montreal ozone
agreement--grew out of the U.S. regulation of chlorofluorocarbons,
the chief culprit in the destruction of the ozone layer, beginning
with a ban on aerosol spray cans in the late 1970s. Other relatively
successful international regimes--for example to limit oil pollution
from tankers, to regulate trade in endangered species, and to control
dangerous pesticides and chemicals--also built on U.S. domestic
efforts, rather than attempting to force the United States to change
its ways through the pressure of an international regime.

From the beginning, however, U.S. climate change policy followed a
different path, focusing on international rather than domestic
measures. To some degree, this reflected the understandable
reluctance of many governments to take domestic action without an
assurance that others would follow suit. Given the global causes of
climate change, if a country acts alone it simply drives up its own
costs without making a meaningful dent in solving the problem.
International action is necessary to make domestic climate policies
effective.

To a greater degree, however, the international focus of U.S. climate
policy reflected a lack of domestic political will. Although polls
consistently indicate that Americans are concerned about climate
change, climate change has until now never emerged as a major
political issue in the United States. Come election time, education,
social security and taxes have taken precedence in voters' minds.
Indeed, climate change usually does not even crack the top three
environmental concerns--clean water, clean air and urban sprawl. As a
result, climate activists have tended to view the international arena
as a potentially more favorable forum.

The only real attempt to enact binding domestic measures related to
climate change occurred early in the Clinton Administration, when
Clinton proposed a broad-based energy tax (the so-called "BTU tax")
as part of his first economic plan. Although Clinton billed the tax
primarily as a revenue rather than a climate change measure and made
it applicable to all energy sources, not just those that produce
greenhouse gases, the tax would have discouraged greenhouse gas
emissions by raising energy prices--and some climate change activists
saw it in that light. However, after a fierce lobbying campaign by
business interests led Clinton to abandon the tax in June 1993, the
administration became gun-shy about pushing for strong domestic
measures and instead shifted its focus to the international
negotiations. For the rest of his administration, Clinton's domestic
climate change policy relied exclusively on voluntary programs--"no
regrets" programs that are arguably in industry's self-interest
because they reduce energy costs--the same approach as that of the
first (and apparently the current) Bush Administration.

In part, the focus on the international negotiations was driven by
the inexorable momentum of the international climate agenda itself,
with major meetings practically every year, which kept climate change
on the front burner. Ironically, these regular meetings--which are
usually seen as a means of keeping pressure on states to act--helped
give Clinton a comparatively easy way out politically. As the
representative of the United States in international affairs, the
administration could temporarily satisfy its environmental
constituency by accepting strong international policies, without
having to undertake the extremely difficult political work of
convincing a conservative Congress to enact domestic legislation to
reduce emissions. Of course, this approach could not work
indefinitely, since international policies to combat global warming
eventually require domestic implementation. But given the complexity
and seemingly never-ending character of the negotiations, the
international approach was able to buy considerable time for an
administration reluctant to expend significant political capital at
home to combat climate change. In doing so, administration officials
could comfort themselves with the argument that they were making
progress in the only way possible, by putting in place an
international system that would be ready to use when America became
serious about climate change (as they were sure would happen
eventually).

Finally, the international focus of the Clinton Administration also
reflected a political calculation that international commitments such
as Kyoto could serve as a political lever to induce stronger domestic
action. If the administration could somehow get the United States to
join Kyoto, then the United States would no longer have any choice:
it would have to reduce its emissions in order to satisfy its
international commitments. In this way, Kyoto could provide the
necessary push to overcome domestic political apathy regarding
climate change.

This strategy, however, put the cart before the horse. If the United
States lacks the political will to take significant domestic action,
why would the Senate agree to a treaty requiring it to do so? The
fallacy in attempting to use international commitments to induce
domestic action is that international law itself depends on consent.
International law does not impose requirements; it sets forth rules
that states are free to accept or reject.

In other countries, international politics may in some cases drive
domestic politics. Indeed, many countries in Europe and elsewhere see
the international arena as a place to influence their own domestic
agenda as well as to pressure others. Environmental ministries, in
particular, have learned to use international processes as a way to
achieve outcomes that other ministries might not otherwise support.
But for the United States, domestic politics drives international
politics, not vice versa. The United States is comparatively
impervious to international pressure, and the system of separation of
powers makes it difficult for an Executive Branch department or
agency to use the international arena as a way to push Congress into
domestic action. Even if the administration were willing to accept a
treaty such as Kyoto, it must get the advice and consent of
two-thirds of the Senate. As Kyoto illustrates, this is next to
impossible in the absence of a strong domestic political consensus.

Of course, international negotiations can sometimes push the envelope
outward at the margins; they need not always precisely mirror what
has been agreed domestically. But they need a domestic foundation in
order to get traction, and cannot get too far out in front of the
domestic center of gravity. Kyoto violated both of these precepts
and, as a result, was on life support domestically long before Bush
pulled the plug.

In moving forward, climate change activists would do better to focus
their efforts on building a domestic political consensus to reduce
emissions rather than on the international negotiations. The current
international backlash against Bush's repudiation of Kyoto has helped
create new domestic momentum to address climate change. But
ultimately the decision to limit U.S. emissions must come from
within. Although there is much to criticize in the Bush
Administration's handling of the climate change issue, one thing it
got right was to focus initially, in the Cabinet review, on what the
United States should do domestically to address the problem. Thus
far, it has failed to articulate a credible approach, but, in the
wake of Bush's repudiation of Kyoto, a serious debate has finally
begun in Congress about how the United States should address climate
change at home. If this results in domestic requirements to reduce
emissions, even if only modestly, it would be a significant step
forward.

Lesson 4: It's the Economy, Stupid

Emissions targets such as those contained in Kyoto commit countries
to particular environmental results regardless of the economic costs.
In the case of Kyoto, the costs for the United States would be highly
uncertain (with estimates varying by a factor of ten). At the low
end, Kyoto would add merely a few cents to a gallon of gasoline; at
the high end, it would impose higher costs than the OPEC oil squeeze
of the 1970s, which sent the U.S. economy into recession (and much of
the rest of the world economy with it).

The Clinton Administration attempted to address the problem of cost
by developing its own economic assessment of Kyoto, which, not
surprisingly, found the costs to be quite low. But the
administration's analysis was based on several unrealistic
assumptions and, in any event, could not eliminate the uncertainty
stemming from the existence of much higher cost estimates by other
modelers.

Given Clinton's mantra during his first campaign--it's the economy, stupid!--it is surprising that the Clinton Administration failed to endorse a proposal made by several economists prior to Kyoto that would have addressed the cost issue head on, by establishing a cap on how high carbon prices could go.  Under this approach, countries would agree in advance on a "safety valve" price. If emission reductions prove to be cheap, as many environmentalists believe, then the price of carbon would never reach the safety valve price and countries would simply meet their Kyoto targets. But if emissions prove expensive, as many conservatives argue, a country could issue additional permits at the safety valve price. The effect would be to ease the emission target in order to limit compliance costs and provide predictability. Through this mechanism, countries could decide how much they were willing to pay to combat climate change and set the safety-valve price accordingly, with a guarantee that they would not need to pay any more.

The safety valve proposal was known to Clinton Administration officials prior to Kyoto and received support from the President's economic team. Nevertheless, under pressure from environmentalists, the administration ultimately failed to endorse it. Last year, the proposal again received considerable attention both within the administration and internationally in the preparations for the conference at The Hague. Indeed, discussions with European and developing country negotiators suggested that it might have been negotiable as part of a package deal. Again, however, the administration declined to act, fearing a negative reaction from environmental groups immediately before the presidential election.

In developing an alternative to Kyoto, a safety valve approach would provide a convincing response to critics who contend that limiting emissions will prove to be very costly. In doing so, it would help defuse concerns about the economic risks of mandatory emission reductions and thus make a mandatory approach more politically viable.

What Next?

ALTHOUGH AN impressive achievement, Kyoto suffers from the sin of hubris. Whether or not the United States eventually negotiates some arrangement with the Kyoto system, it should consider a more modest, incremental approach to the problem. Rather than negotiate international commitments first and then seek domestic support, the United States should decide what it is willing to do domestically, and then examine ways that the international process can help support these efforts.

A domestic climate policy could take several forms. Although economists tell us that a revenue-neutral carbon tax would probably be the most efficient policy instrument, it would violate the political orthodoxy of "no new taxes" and hence is probably a non-starter. A system of mandatory domestic targets and emissions trading (usually referred to as "cap and trade"), combined with a safety valve to limit the potential costs of compliance, is more viable politically. The level of initial effort could be comparatively modest. What is crucial is not so much the precise level of effort, which could be ratcheted up later if necessary, but a sound architecture that achieves significant buy-in from both industry and environmentalists and hence would not be subject to the vagaries of election cycles or media fads.

Whatever approach is selected, by beginning at the national level, the United States would retain control of its climate policy and be free to design an alternative system that could co-exist and compete with Kyoto. Such an approach would also help repair America's shattered credibility internationally.

International efforts should complement rather than attempt to coerce domestic action. The 1992 UN Framework Convention on Climate Change, to which the United States is a party, provides a solid base on which to build. Among other things, it requires countries to report regularly on their greenhouse gas emissions and on their policies to limit emissions, and establishes an international process to review these national reports. These reporting and review procedures help provide an information base that will be important regardless of what direction the international climate change regime may take. More immediately, they promote accountability by providing international scrutiny of domestic climate change measures.

Nevertheless, while the Framework Convention provides a useful infrastructure for international cooperation, the next step is not necessarily U.S. re-engagement in the Kyoto process. One alternative would be to begin with an agreement at the regional level or among like-minded states that would allow American firms to receive credit for emission reduction projects in other participating countries. Over time, as the Kyoto system gets underway and other countries develop their own national climate change programs, a system of mutual recognition could develop under which the United States, for purposes of emissions trading, would recognize other countries' emission allowances and vice versa. The system would grow from the bottom up, through an increasing integration of national climate programs. Eventually, developing countries might see the benefits of joining, since most can reduce emissions more cheaply than industrialized countries (due to the inefficiency of their energy systems), a comparative advantage t hat they could exploit through an international trading system.

We need to remember that we are dealing with a century-long problem, and that the level of emissions reductions we achieve in the short-term will have only a modest long-term impact. We should not delay-delay merely forecloses options and ultimately raises the overall costs of responding. But we can afford to proceed deliberately, learning from experience and recognizing that we are building an architecture for the long-term. To be effective, climate change policy need not be built in a day.

Daniel Bodansky is a professor of law at the University of Washington. He was the Department of State's Climate Change Coordinator from August 1999 through June 2001.