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International policies for mitigation of climate change provide a global public good and thus suffer from 'free riding,' i.e., inaction of governments. In 25 years of negotiations under the UN Framework Convention on Climate Change (UNFCCC), the regime has changed its character from a top-down approach based on mandatory emissions commitments to a bottom-up system of voluntary government pledges. At the same time, various initiatives by governments at all levels and private companies have been established, but most are limited to emissions reporting and exchange of knowledge on mitigation technologies. None of the alternatives has shown a higher mitigation effectiveness than the Kyoto Protocol. Generally, the transition toward a bottom-up regime risks a reduction of transparency and increases in the transaction costs of mitigation. Although it could give rise to a club of countries engaging in strong mitigation that could expand over time, it is unlikely to be ambitious enough to achieve the target of limiting warming to 2°C. On the one hand, carbon prices will be applied in a larger number of jurisdictions, and mitigation technologies diffuse around the world. On the other hand, carbon price levels will remain relatively low, and their mitigation benefits will be more than outweighed by the growth of infrastructure and consumption. Thus, a temperature increase of at least 3°C by 2100 becomes more and more likely. [ABSTRACT FROM AUTHOR]