The third meeting of the Conference of the Parties of the Framework Convention on Climate Change held in Japan last December was a lost opportunity to set a realistic policy framework for addressing climate change in the coming decades. A number of countries proposed targets for greenhouse emissions, to be reached by a target date. The outcome was a range of different targets for each country. Analysis with the G‐cubed multi‐country model suggests that fixed targets are a costly way to address climate change. The extent of potential cost suggests the agreement will eventually fail. A better way to address climate change is to focus on uniformity in policy instruments that deliver differentiated outcomes rather than focus on differentiated policy settings.