Evidence of the climate policy recession is all around us. The United States will not pass comprehensive climate legislation until at least 2013 due to strong domestic opposition. Europe is unable to decide whether to change its 2020 emission reduction goal from 20 percent to 30 percent. And the international climate negotiations would, on current trajectories, only reduce global emissions by half the amount needed. But there are promising opportunities for climate action. Both Europe and the United States are reforming traditional domestic policies like agricultural subsidies, taxation, and the electrification of automobile transport to reduce emissions. To complement these efforts, the transatlantic partners must pioneer a new style of low-emissions development diplomacy to strengthen smart energy and land-use policies in major emerging economies. This requires much better coordination of technical assistance programs among donor agencies and mainstreaming low emissions development into existing bilateral and multilateral development programs.