I really want this to be true but the elephant in the room is auditing. Without the ad network performing tracking, advertisers have no way to independently verify ad performance and corresponding payment to publishers for CPC ads. For CPA ads, the publisher has no way to independently verify the advertiser is paying out correctly for sales conversions.

You need a third party in the middle to arbitrate. AFAIK, the only way to do that at scale is with cookies from an ad network dropped in and tracked via a beacon.

I guess the only solution is for a new, non-commercial advertising network to spring up (sort of like an NGO) with a strong enough charter and ethical approach that end users (or browsers themselves?) trust limited tracking from ads served through that network. The problem is, who funds it? Not the advertisers or publishers as that would destroy the impartiality of the network.

Edit: and problem two is if such an ad network came in to existence and was successful, it would end up a de-facto monopoly for on-line ad distribution. Apart from the headwinds it would attract from Google, there are obvious issues around free-speech, mono-culture etc.

Edit 2: or maybe the "internet" agrees what an ethical ad network should look like and then any one is free to set one up but must submit to regular auditing by a new internet body to make sure they are sticking to the agreed "charter". That way the ad network could be operationally funded by publishers/advertisiers but still retain user's trust. A little like the CA market for SSL certs. If an ad network started misbehaving, browsers themselves could block/de-list them (like they do when they revoke root certs from rogue CAs)