This paper critically reviews the current economic models of climate change and policy options and examines smart adaptations as an alternative policy solution based on individual incentives. A variety of the models based on negative externality as well as catastrophe models of global warming are reviewed. This paper finds that the current models fail to account for disparate regional and private incentives under changing climates. We introduce the theory of the global commons (public goods) to illuminate the conflicts between individuals and the global objective. Smart adaptations are those that reduce the damage from global warming but also mitigate greenhouse gases at the same time. They are motivated by individuals, but supported by the public sector. Smart adaptation strategies include natural resource uses, land use changes, consumer actions, migration, population changes, alternative energy sources and technological advances. This paper discusses whether smart adaptations are sufficient to prevent climate catastrophe.