In February 2005, the Kyoto Protocol to the United Nations Framework Convention on Climate Change came into force, but without participation by the United States. Its impacts on emissions of greenhouse gases—including carbon dioxide (CO2), the primary anthropogenic driver of climate change—will be trivial; but scientific (Robert T. Watson, 2001) and economic (Charles D. Kolstad and Michael A. Toman, 2001) analyses point to the need for a credible international approach. Because the Kyoto Protocol’s ambitious targets apply only to the short term (2008–2012) and only to industrialized nations, the agreement will impose relatively high costs and generate only modest short-term benefits, while failing to provide a real solution (Joseph E. Aldy et al., 2003). For these reasons, most economists see the agreement as deeply flawed (Richard N. Cooper, 1998; David G. Victor, 2001; Warwick J. McKibbin and Peter J. Wilcoxen, 2002), although some see it as an acceptable first step (Axel Michaelowa, 2003). Virtually all agree, however, that the Protocol is not sufficient to the overall challenge. We describe the basic features of a postKyoto international global climate agreement, which addresses three crucial questions: who, when, and how. The respective elements are: first, a means to ensure that key nations—industrialized and developing—are involved; second, an emphasis on an extended time path of action (employing a cost-effective pattern over time); and third, inclusion of market-based policy instruments. I. Who—Expand Participation to Include All Key Countries