Developing countries reject meaningful emission targets (recent intensity caps are no exception). This prevents the Kyoto Protocol from establishing a global price for greenhouse gas emissions and leaves almost all new emissions unpriced.

This paper proposes a new pair of commitments – a commitment to a binding carbon-price target and to a Green Fund financed by a form of carbon pricing. The result is a price mechanism that neither requires developing countries to accept emission caps nor requires industrial countries to accept carbon taxes.